Senators introduce bipartisan bill to improve IRS

A bipartisan group of lawmakers on the Senate Finance Committee offered legislation on Thursday to make improvements to the IRS, as the panel voted along party lines to advance President Trump’s pick to lead the agency.

The bill, from Finance Committee Chairman Orrin Hatch (R-Utah), ranking member Ron Wyden (D-Ore.) and others on the panel, aims to strengthen taxpayers’ rights and prevent taxpayers from having their identities stolen.

“This bipartisan legislation will make common-sense changes to help taxpayers and streamline administrative rules at the IRS, which will allow tax officials and agents to better safeguard the American people against financial predators,” Wyden said in a statement.

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Hatch said that it’s important to modernize the IRS as the agency works to implement the tax-cut law Republicans passed in December.

“Ensuring the IRS has greater flexibility and bringing it into the 21st century continues to be a top priority — especially with the largest rewrite of the tax code in more than three decades on the books,” he said.

The senators’ bill is based on legislation that the Finance Committee unanimously approved in 2016. The House passed bipartisan legislation to modernize the IRS in April, and the senators’ bill has some commonalities with the House’s measure.

Like the House-passed bill, the senators’ bill would require the IRS to provide notice when it plans to close taxpayer assistance centers, mandate electronic filing for tax-exempt organizations, provide that tax-related identity theft victims have a single point of contact at the IRS, and direct the Treasury Department to set up a program where anyone who requests an identity protection personal identification number can be issued one.

Other provisions in the senators’ bill are designed to strengthen protections for whistleblowers and make changes to rules governing IRS employees. The bill also would renew the IRS’s ability to hire information technology professionals through a streamlined process.

Hatch’s office announced the bill as Senate Finance Committee members were voting on Trump’s nominee to be IRS commissioner: California tax lawyer Chuck Rettig.

Lawmakers in both parties said that they thought Rettig was qualified, but Democrats voted against the nomination because they dislike guidance the IRS released Monday that reduces donor reporting requirements for certain tax-exempt groups.