Fair and Accountable IRS Reviews Act
Fair and Accountable IRS Reviews Act
Plain Language Summary
# Fair and Accountable IRS Reviews Act — Plain Language Summary **What the bill does:** This bill clarifies and strengthens oversight rules for IRS employees who propose tax penalties against taxpayers. It requires that before the IRS sends any written notice about a penalty to a taxpayer, a supervisor must first approve it in writing. The bill defines "immediate supervisor" as the person the IRS employee directly reports to, rather than allowing the IRS to use broader definitions through its regulations. **Who it affects:** The bill primarily affects IRS employees and taxpayers who receive penalty notices. It aims to ensure there's a clear chain of command and consistent approval process when penalties are being assessed.
Taxpayers could potentially benefit from an additional review layer, while the IRS would need to follow stricter procedural requirements. **Current status:** The bill has passed the House of Representatives. It has not yet been voted on by the Senate, so it is not yet law. The stated purpose is to increase accountability and standardize how the IRS handles penalty approvals, though supporters and opponents may differ on whether the changes improve efficiency or add unnecessary bureaucracy.
CRS Official Summary
Fair and Accountable IRS Reviews ActThis bill provides that an Internal Revenue Service (IRS) employee’s immediate supervisor for purposes of approving certain federal tax penalties is the person to whom such employee reports. The bill also provides that an immediate supervisor’s approval of certain federal tax penalties must be obtained (in writing) before any written communication related to such penalties is sent to the taxpayer.As background, current law requires that the initial determination by an IRS employee to assess certain federal tax penalties be approved (in writing) by such employee’s immediate supervisor (or a designated higher-level official). Under IRS regulations, an immediate supervisor is any individual with responsibility to review another individual’s proposed federal tax penalties (without such proposal being subject to an intermediary’s approval). The IRS regulations also establish requirements for when such approval must be obtained based on whether the federal tax penalty is subject to pre-assessment review or raised in Tax Court proceedings.
Latest Action
Received in the Senate and Read twice and referred to the Committee on Finance.