Congress is set to consider numerous reforms to the IRS in both the tax extenders and omnibus funding bills. Together, this package of IRS reforms are good for taxpayers, will clamp down on IRS overreach, and will ensure the agency is held accountable.

The majority of these reforms originated from the House Ways and Means Oversight Subcommittee, chaired by Congressman Peter Roskam (R-Ill.), and many attracted bipartisan support in the House of Representatives. Now, ATR urges Congress to support and pass these pro-taxpayer reforms and help rein in the out of control IRS.

Bars IRS from applying gift tax to donors of non-profits

In the past, the IRS has been caught targeting political speech through a twisted interpretation that designated social welfare organizations as “persons,” meaning any donors to these organizations would be liable to pay the gift tax.

This blatant attempt to harass taxpayers based on their ideology had no basis in law and no serious tax expert agreed with this interpretation, but that did not stop the IRS.

A provision in the extenders bill puts a stop to this targeting and expressly prohibits the IRS from applying the gift tax to donors of political non-profits. Chairman Roskam has taken the lead on this issue, and he should be congratulated for his leadership against IRS overreach.

Prohibits IRS employees from using personal email accounts for official business

Within this package of legislation, the IRS is expressly prohibited from using their personal email accounts for work purposes. This reform is especially important in light of the Lois Lerner targeting scandal.

Following investigations into this targeting, it was  discovered that Lerner used two personal email addresses for official work, including one address under her dog’s name. The ability to hide  work communications on a personal email account made it that much harder for investigators to discover the truth.

Creates a taxpayer bill of rights

Another major reform included in this legislation institutes a Taxpayer Bill of Rights. This will guarantee that taxpayers are accorded a basic level of service by IRS employees. The ten point bill guarantees taxpayers important rights like the right to privacy and confidentiality, the right to quality service, and the right to a fair and just tax system.  

Streamlines 501(c)(4) application process

As a Senate Finance Committee investigation discovered, the IRS granted just one conservative group 501(c)(4) non-profit status between 2009 and 2012. This proved the application process was in desperate need of reform to ensure this kind of abuse could never happen again. A provision within the IRS reforms package will streamline the application process for non-profits and create a much clearer and much fairer system.

Prevents the IRS from targeting based on ideology

As a condition of their funding, the IRS is explicitly prohibited from discriminating against individuals or groups who are seeking to exercise first amendment rights or political beliefs. Given the agency’s recent history of targeting groups it does not agree with, this provision is a no-brainer.

No bonuses/ hiring of employees with tax debt

Another reform within this package expressly prohibits the IRS from granting bonuses of any kind, or re-hiring fired employees that have been found to have outstanding tax debt. Simply, if any IRS employee can’t be trusted to pay their own taxes, they have no business collecting other people’s taxes.