H.R. 5444 makes numerous changes to reorganize the Internal Revenue Service (IRS) in an attempt to focus the agencies efforts more on taxpayer service. Specifically, the bill does the following:
- Creates an independent appeals process to improve the dispute resolution process within the agency.
- Requires the IRS to submit to Congress a comprehensive plan to improve its customer service strategy, based on best practices from the private sector.
- Requires the IRS to maintain the IRS Free File Program that provides free individual income tax preparation and electronic filing services to the lowest 70 percent of taxpayers by adjusted gross income.
- Ensures taxpayers have access to the same information as the IRS during the dispute resolution process, in an attempt to level the playing field.
- Requires the IRS to submit to Congress a plan to redesign the structure of the agency to improve efficiency, enhance cyber security, and better meet the needs of taxpayers.
- Ensures that the IRS sends notice to the actual taxpayer when conducting an audit before contacting friends, neighbors, and clients.
- Restructures the IRS’s enforcement tools to ensures taxpayers do not have their assets seized without proper, timely, and fair notice.
- Changes the head position at the IRS from a Commissioner to an Administrator.
Of particular note, this bill would simplify some taxpayers' access to case files. Under current law, a taxpayer must file a Freedom of Information Act (FOIA) request in order to obtain from the IRS the file of information on his or her case. The bill requires that the administrative case file referred to Independent Appeals be available to certain individual and small business taxpayers. Eligible taxpayers are individuals with adjusted gross income below $400,000 and entities with gross receipts below $5 million. Under the proposal, eligible taxpayers may review the non-privileged portions of materials developed by the IRS for its administrative case file not later than ten days prior to the first conference with Independent Appeals. In providing the materials, the IRS need not produce for the taxpayer the documents that were initially provided to the IRS by the taxpayer. In addition, the taxpayer may elect to waive the ten-day period and accept access to the materials on the date of the scheduled conference.