IRS Bill to Increase Penalties Passes House

IRS Bill to Increase Penalties Passes House

Another success under the Trump Administration…

News broke on Tuesday, April 09, that the House had officially passed a new IRS bill that initiates sweeping changes to regulation and programs. These changes effectively “modernize” the IRS, and are overwhelmingly supported by the Republican voter base…

…But that doesn’t mean it is entirely without controversy, either.

It wouldn’t be a normal day unless the Left had something to complain about, now would it? They’ve already stepped up to the plate to try and undermine it.

Here’s the facts.

Key Points

  • H.R.1957 — 116th Congress (2019-2020)  passed the House through a voice vote. It aims to significantly overhaul key areas of the system, making it one of the largest tax reforms since Trump first stepped into office.
  • Changes affect nearly every aspect of the IRS, including taxpayer services, the rights off taxpayers during enforcement, issues surrounding the potential for identity theft, and management of taxpayer information via electronic systems.
  • While the bill has been well-received by both parties, there are a few “bone of contention” points buried within the changes. For example, it removes the IRS’s ability to provide access to a free tax platform for middle to low-income Americans (typically via a third-party). It also significantly increases the penalty for failing to file taxes on time.
  • Of course, the Left took off running with this the moment it went public. Freshman Rep. Katie Hill (D-Calif.) accused the government of submitting to “corporate tax lobby” by sacrificing the best interests of everyday Americans.
  • Still, even Hill begrudgingly acknowledged that she could not and would consider her worries over the bill more important than the rest of the content within it. “This puts us in a difficult spot,” she said. “But the rest of this bill is too important.”
  • Rep. Alexandria Ocasio-Cortez (D-N.Y.) had a lot to say about the bill, too. She called it a “huge scandal” that “Congress has not yet instructed the IRS to automatically prepare taxes for the vast majority of Americans.”
  • “With this bill,” she added, “I would like to again commend the advancements that we have made for working-class people. But long term, we should be looking at a solution where everyday people do not necessarily have to spend hours every year preparing tax returns when the majority of Americans have relatively simple and straightforward returns.”
  • Look… honesty is one thing. Leaving IRS employees, who already make thousands of errors per year, in charge of filing everyone’s taxes, seems like a great way to give the government far too much power. What happens when the IRS starts making tiny mistakes here and there — too small to be noticed, but significant enough in number to bring in thousands of dollars more in taxes? Food for thought…
  • There were also concerns from the Left that changes to the free tax filing partnership might make it harder for low-to-middle-income Americans to file their taxes for free. Senate Finance Committee Chairman Chuck Grassley (R-Iowa) was quick to dismiss this concern as overblown, indicating that H.R. 1957 “would continue the IRS Free File Program” instead.
  • “Nothing in the legislation would prevent the IRS from continuing to provide online assistance to taxpayers or develop new online options to help taxpayers,” he explained in a later statement shortly after the vote. “Arguments to the contrary aren’t based in fact and rely on either misunderstandings or misleading special interests.”
  • H.R. 1957 also introduces other less-impactful, yet still important changes, such as the creation of an official appeals office, grants for nonprofits who help Americans file their taxes, and exemptions to private debt collection programs. It will also create new options for Americans who have been affected by identity theft in a way that puts their Social Security Number (SSN) or tax information at risk.
  • It’s safe to say that this new bill is a bit of a mixed bag. While imperfect, it does contain some significantly beneficial changes for most average Americans. As for when (or if) it will pass the Senate…no word on that just yet. We’ll keep you posted.

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