Fair and Accountable IRS Reviews Act
Summary
The "Fair and Accountable IRS Reviews Act" aims to amend the Internal Revenue Code of 1986 by reforming penalty and interest provisions. Specifically, it mandates that any initial determination to assess a penalty must be personally approved in writing by the immediate supervisor of the individual making the determination, or a higher-level official designated by the Secretary. This requirement applies before any written communication regarding the penalty is sent to the taxpayer.
The bill defines "immediate supervisor" as the person to whom the individual making the determination reports. These amendments will apply to notices issued and penalties assessed after December 31, 2025.
In essence, the bill seeks to introduce a layer of oversight and accountability in the penalty assessment process within the IRS.
Expected Effects
The primary effect of this bill would be to change the procedure for assessing penalties under the Internal Revenue Code. It introduces a mandatory supervisory review before a penalty can be assessed or communicated to the taxpayer.
This could lead to fewer erroneous penalties and increased fairness in the IRS's dealings with taxpayers. It may also increase the administrative burden on the IRS.
Potential Benefits
- Increased accountability within the IRS penalty assessment process.
- Reduced likelihood of erroneous penalties being assessed.
- Greater fairness and transparency for taxpayers.
- Potential for improved taxpayer-IRS relations.
- Could lead to more consistent application of penalty rules.
Potential Disadvantages
- Potential for increased administrative burden on IRS supervisors.
- Possible delays in the penalty assessment process.
- Could create additional layers of bureaucracy.
- May not address all sources of unfairness in the tax system.
- Potential for inconsistent application if supervisors interpret rules differently.
Constitutional Alignment
The bill appears to align with the general principles of fairness and due process, although the Constitution does not explicitly address the specifics of IRS penalty assessments. Article I, Section 8, grants Congress the power to lay and collect taxes, but this power is subject to constitutional limitations such as due process.
The Fifth Amendment guarantees due process, which includes fair procedures. By requiring supervisory approval, the bill aims to enhance the fairness of penalty assessments, potentially aligning with the spirit of the Fifth Amendment.
However, the Constitution does not mandate this specific type of procedural safeguard, so the alignment is more in principle than in direct constitutional requirement.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).