IRS Accountability and Taxpayer Protection Act
Summary
The "IRS Accountability and Taxpayer Protection Act" aims to amend the Internal Revenue Code of 1986 by modifying procedural rules for penalties and disallowance periods. It mandates supervisory approval for initial penalty determinations and disallowance periods. The bill also requires the Treasury Secretary to publish annual reports on penalties assessed by the IRS.
Expected Effects
The act will likely increase the administrative burden on the IRS by requiring supervisory approval for penalty assessments. It may also lead to fewer penalties being assessed due to the increased scrutiny. Taxpayers could benefit from a more transparent and accountable penalty assessment process.
Potential Benefits
- Increased accountability within the IRS through mandatory supervisory approval of penalties.
- Enhanced transparency via annual public reports on IRS penalty assessments.
- Potential reduction in unfairly assessed penalties due to stricter procedural requirements.
- Clearer definition of 'initial determination' to prevent ambiguous penalty notices.
- Could lead to more consistent application of penalties across different IRS units.
Potential Disadvantages
- Increased administrative burden on IRS supervisors, potentially slowing down penalty assessment processes.
- Potential for inconsistent application if supervisors interpret the rules differently.
- The report requirement may add to the IRS's operational costs.
- Could create opportunities for taxpayers to challenge penalties on procedural grounds, even if the penalty is justified.
- May not address underlying issues that lead to penalties, such as tax law complexity.
Constitutional Alignment
The bill aligns with the Constitution by promoting due process and accountability within a government agency. While the Constitution does not explicitly address tax penalty procedures, the Fifth Amendment guarantees due process, which includes fair and transparent application of laws. The reporting requirement enhances government transparency, aligning with the spirit of open government.
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).