Summary
Changes tax rules to require the IRS to tell taxpayers exactly what information it wants from others and gives them more time to respond first.
What problem does this solve?
The IRS can ask others for a taxpayer's private information without being specific, which can feel intrusive. This bill requires the IRS to list the exact information needed and give the taxpayer time to provide it first.
What does this bill do?
Requires specific information requests
Mandates that when the IRS wants information from other people about a taxpayer, it must first list each specific piece of information it is looking for.
Extends taxpayer response time
Gives taxpayers at least 45 days to respond to an information request before the IRS contacts other people. A taxpayer can also ask for more time if they have a good reason.
Creates an exception for the IRS
Allows the IRS to skip the requirement to list specific information if the Secretary of the Treasury decides that getting the information is necessary.
Who does this affect?
- U.S. Taxpayers
- Internal Revenue Service (IRS)
What is the real world impact?
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Increases taxpayer rights and privacy
Strengthens taxpayer rights by requiring the IRS to be transparent about information it seeks from third parties. This gives taxpayers a chance to provide the information themselves, protecting their privacy from unnecessary disclosures.
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Could slow down tax investigations
Requiring the IRS to give a 45-day notice before contacting third parties could slow down investigations into tax fraud or evasion. It may also alert individuals under investigation, giving them time to hide information.
When does this start?
The new rules will take effect for notices sent by the IRS starting 12 months after the bill becomes law.