Daily Tax Update - April 20, 2016: House Passes Two Bills Increasing Congressional Oversight of IRS

House Passes Two Bills Increasing Congressional Oversight of IRS:  Today the House voted 245-179 for a bill (H.R. 4885) to give Congress power over user fees collected by the IRS.  In addition, the House voted 254-170 for another bill (H.R. 1206) to prevent the IRS from making new hires until it certifies that no agency personnel have seriously delinquent tax debt, defined as any outstanding federal tax liability for which a notice of lien has been filed in public.

Senate Finance Committee Approves Identity Theft/Refund Fraud Bill, Rejects Paid Preparer Regulation:  Today the Senate Finance Committee approved a bill that would require the IRS to increase security measures to combat identity theft and refund fraud.  However, in a 14-12 roll call vote, committee members rejected an amendment to the bill introduced by Senator Ron Wyden (D-OR) that would have imposed minimum standards of competence on paid tax return preparers, removed the IRS from the regulatory process, and placed the regulatory authority under Treasury’s Office of Professional Responsibility.

Chairman’s Modifications to Taxpayer Protection Bill Include Ban on Third-Party Contractors:  Senate Finance Committee Chairman Orrin G. Hatch (R-UT) added several modifications to the Taxpayer Protection Act of 2016, which is scheduled to be marked up today.  Among other things, the bill modifications would improve communication with whistleblowers during investigations, require the IRS to notify exempt organizations before revoking exempt status for failing to file information returns, and would require the Secretary of the Treasury (or his or her delegate) to establish procedures to implement a sole point of contact for taxpayers adversely affected by identify theft.  Additionally, the modifications would bar the IRS from delegating to third-party contractors the authority under section 7602 to examine books and records, summons persons, or take sworn testimony related to a tax matter.  

The modifications are expected to cost $115 million over the next 10 years, according to estimates released by the Joint Committee on Taxation.  

House Ways and Means Committee Unanimously Passes American Manufacturing Competitiveness Act:  Today the House Ways and Means Committee unanimously voted to pass the American Manufacturing Competitiveness Act of 2016 (H.R. 4923).  The bipartisan bill creates a process for the House to consider manufacturing tax cuts through the Miscellaneous Tariff Bill.  The bill is expected to head to the House floor.