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What is IRS MATH Act? US House passes bill to transparently handle tax return errors, here's what happens next
IRS MATH Act will ensure that taxpayers are treated fairly at the Internal Revenue Service.
The US of Representatives passed a bipartisan bill that aims to increase transparency in the Internal Revenue Service's (IRS) management of tax return mistakes.
According to critics, taxpayers face a challenging process after receiving a notification of a mathematical or administrative error. The the IRS is permitted to modify tax responsibilities without starting an examination. It can also send automated letters that frequently lack specificity and may result in unanticipated payments or reductions in refunds.
Proponents of the proposed legislation claim that it fills a long-standing communication gap with taxpayers, eliminate needless financial burden and reduce misunderstanding about their filings.
Randy Feenstra, the Iowa Republican Representative who introduced the bill, said, “Yesterday, the U.S. House of Representatives unanimously passed my bill — the IRS MATH Act — which will ensure that taxpayers are treated fairly at the IRS.”
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What is IRS MATH Act?
Feenstra introduced the The Internal Revenue Service Math and Taxpayer Help Act, H.R. 998, in February. The bill has been passed by the lower house and it's now awaiting Senate review.
The act requires the IRS to provide more detailed justifications when it finds mathematical or administrative mistakes in tax returns.
According to the measure, every IRS notification must contain precise details about the issue and the actions the person can take to correct it.
The notifications must specify the precise line on the tax return that was impacted and provide a “plain language” description of the problem category.
In order to give taxpayers a clear understanding of how any changes were made, they need to include a detailed account of the IRS's recalculation of the return.
The IRS's automated transcript service will mention its own phone number on notices, in addition to the deadline for a taxpayer to apply for an abatement—basically, a reversal—of the tax adjustments.
The bill specifies that these requests for abatement can be made in person, by phone, electronically, or by mail.
Furthermore, if the IRS subsequently makes adjustments that lower the assessment associated with an earlier error, it is required to issue a subsequent notice explaining the abatement
Here's what happens next
As the bill received a nod from the House, H.R. 998 now awaits the Senate approval. If gets passed, it will be send to President Trump, seeking his signature.
