21st Century IRS Act: Modernizing Technology & Preventing Identity Theft at the IRS (H.R. 5445)

What is H.R. 5445?

(Updated April 9, 2019)

This bill — the 21st Century IRS Act — would seek to modernize technology at the Internal Revenue Service (IRS) and protect the identity of taxpayers. It would codify recent IRS efforts aimed at combating identity theft tax refund fraud through public-private partnerships, require the IRS to develop an internet portal allowing taxpayers to file 1099 Forms beginning in 2020, and allow the IRS to directly accept credit and debit card payments for taxes (as long as the taxpayer pays the fee).

The bill would also authorize the IRS to develop an automated system to request transcripts under the Income Verification Express Service (IVES) system. To cover the costs of developing it, the IRS would be authorized to assess and collect a separate user fee over a two-year period on all IVES requests.

The Treasury Department (which oversees the IRS) would be required to work with private industry to find ways to utilize new payment platforms and increase the amount of tax refunds delivered electronically.

Argument in favor

This commonsense, bipartisan bill would overhaul the IRS so that the agency can make better use of technology in collecting taxes while improving identity protections for taxpayers.

Argument opposed

There’s no need to modernize the technology used by the IRS or expand consumer protections. If taxpayers don’t know how to use a fax machine that’s their own problem.

Impact

Taxpayers; and the IRS.

Cost of H.R. 5445

A CBO cost estimate is unavailable.

Additional Info

In-Depth: Sponsoring Rep. Mike Bishop (R-MI) introduced this bill to modernize technology at the IRS and protect taxpayers’ identities:

“This is an issue that hits home for me because I’ve seen the devastation identity theft can inflict on a family or small-business owner. It’s been two decades since Congress has considered legislation to overhaul the IRS, and we all understand the rapid changes our technology has experienced during this timeframe. The 21st Century IRS Act takes meaningful action to address this problem by providing the IRS much-needed tools to strengthen taxpayer protections and bringing IRS technology out of the 20th century.”

Original cosponsor Rep. Suzan DelBene (D-WA) added:

“As a former tech CEO, I was astounded to learn that the IRS is still using fax equipment to conduct regular business and has IT systems still running from the 1960s. It is long past time for the IRS to enter the digital age. The 21st Century IRS Act will enhance IRS security measures to keep taxpayers safe from fraud and give hardworking Americans more peace of mind. It will also make it easier for people to submit tax forms online while easing burdens on small businesses.”

This legislation passed the House Ways and Means Committee on a voice vote and has the support of five cosponsors, including four Republicans and one Democrat.

Media:

• Sponsoring Rep. Mike Bishop (R-MI) Press Release
  
• House Ways and Means Committee Press Release
  
• Section-by-Section
  
• Wolters Kluwer Tax & Accounting Blog