H.R. XX: Taxpayer Assistance Act of 2010

H.R. XX

Taxpayer Assistance Act of 2010

Sponsor
Rep. John Lewis

Date
April 14, 2010 (111th Congress, 1st Session)

Staff Contact
Communications

Floor Situation

The House is scheduled to consider H.R. 4994, the Taxpayer Assistance Act of 2010 on Wednesday, April 14, 2010, under suspension of the rules.  This summary is based on the text expected to be introduced Tuesday, April 13, 2010, by Rep. John Lewis (D-GA)

Bill Summary

H.R. 4994 would amend the Internal Revenue Code of 1986 to reduce taxpayer burdens and enhance taxpayer protections.   

Below is a short summary of each title of the bill:

Title I-Cell Phones and Electronic Filing

  • Removes cell phones and similar telecommunications equipment from listed property.  Under current law, employer-provided cell phones and blackberries are treated as "listed properties," requiring employees to keep extensive records to prove that deductions are claimed solely for business use.  Any non-business related value of such listed property must be included in the employee's income.  This provision would eliminate that requirement.

  • Electronic filing exemption for religious reasons.  In November 2009, Congress enacted H.R. 3548, the Unemployment Compensation Extension Act of 2009-legislation that requires tax return preparers who file ten or more returns to file electronically.  Unfortunately, the law has provided a religious conflict for the Amish population and their tax preparers. This provision would provide the IRS discretion to lift the mandate to file electronically for tax preparers with religious concerns.

  • Interest on refunds for returns filed electronically.  Currently, the IRS is not obligated to pay interest to a taxpayer if a tax refund is provided within 45 days of filing the return.  This provision would require the IRS to pay interest on any tax refund not provided within 30 days, an attempt to encourage taxpayers to file electronically.

 Title II-Collection

  •  Study on the effectiveness of collection alternatives.  The bill would require the IRS to study the effectiveness of collection alternatives, especially the offers-in-compromise (OIC) program.  The OIC is an agreement between a taxpayer and the IRS that settles the taxpayer's tax liability for less than the full amount owed.  This study would compare taxpayers in the program with taxpayers who the IRS denied access to the program.

  • Repeal of partial payment requirement on submissions of offers-in-compromise.  In order to participate in the OIC program, taxpayers must make a good-faith down payment equal to 20 percent of the offer amount.  This provision would repeal the 20 percent down payment.

Title III-Taxpayer Assistance and Protection Improvements:

  • EITC outreach. The bill would direct the Secretary to notify taxpayers eligible for the Earned Income Tax Credit (EITC) if they are so eligible, even if the taxpayer failed to claim the tax credit. The IRS would be directed to provide notice not only for the current year, but also for the preceding two years.

  • Taxpayer notification for suspected identity theft. The provision would direct the IRS to notify a taxpayer if the IRS determines that there was an unauthorized use of the identity of the taxpayer.

Title IV-Revenue Provisions

  • Expansion of bad check penalty to electronic payments.  Any bad authorization of an electronic payment on all commercially acceptable instruments of payment to the IRS must pay a 2 percent penalty of the amount authorized by the taxpayer.  If the amount is less than $1,250, the penalty is the lesser of $25 or the amount of the authorized payment.

  • Increase the information return penalties.  Any person required to file information returns are subject to penalties for failure to file.  This provision would increase the penalties, based on the following table:

 

Time of Filing

Current Law

Proposed Change

Not more than 30 days late

$15 per return / $75,000 cap

$30 per return / $250,000 cap

31 days late - August 1st

$30 per return / $150,000 cap

$60 per return / $500,000 cap

After August 1st

$50 per return / $250,000 cap

$100 per return / $1,500,000 cap

Intentional disregard

$100 per return / no cap

$250 per return / no cap

 

Under both current law and the provision, reduced caps apply to small filers with gross receipts under $5 million.  These caps are also increased:

 

Time of Filing

(Small Filers)

Current Law

Proposed Change

Not more than 30 days late

$15 per return / $25,000 cap

$30 per return / $75,000 cap

31 days late - August 1st

$30 per return / $50,000 cap

$60 per return / $200,000 cap

After August 1st

$50 per return / $100,000 cap

$100 per return / $500,000 cap

Intentional disregard

$100 per return / no cap

$250 per return / no cap

   

 

*Tables provided by Ways and Means Republican Staff

Background

The Internal Revenue Code of 1986 is the main U.S. Code of domestic statutory tax laws of the United State.  The tax code includes the laws covering income tax, payroll taxes, gift taxes, estate taxes, and statutory excise taxes. 

Cost

The Congressional Budget Office (CBO) has not yet produced a cost estimate for this bill.