WASHINGTON – U.S. Senators Ben Cardin (D-Md.) and John Barrasso (R-Wyo.), both members of the Senate Finance Committee, today introduced the bipartisan Taxpayer Privacy and Notification Act (S. 2111) to give additional protection to taxpayers by providing more transparency from the Internal Revenue Service (IRS).
Current law requires the IRS to notify taxpayers before contacting third parties – such as banks or employers – when investigating whether or not a person owes taxes, but does not require the IRS to disclose to taxpayers what specific information they are seeking. The Barrasso-Cardin legislation would require the IRS to disclose exactly what information it is seeking from third parties and give taxpayers 45 days to provide that information directly to the IRS themselves.
“Wyoming taxpayers shouldn’t have to worry about the Internal Revenue Service (IRS) soliciting personal financial information behind their backs without first having an opportunity to provide it themselves,” said Senator Barrasso. “By providing that opportunity, our bipartisan bill will safeguard the reputation of taxpayers and small business owners across the country. It will also force the IRS to be as transparent as possible when it comes to the privacy of hardworking Americans.”
“Following the recommendation of the National Taxpayer Advocate, our bill provides taxpayers greater transparency and, most importantly, time to correct inadvertent errors or omissions in filings,” said Senator Cardin. “The IRS works to ensure taxpayers pay their fair share. Congress can provide appropriate tools that allow the IRS to operate efficiently while also protecting taxpayer rights.”
- This bill amends section 7602(c) of the Internal Revenue Code.
- This bill would give taxpayers no less than 45 days (or more, if requested for reasonable cause) to respond with the requested information.
- The current 45-day requirement for notification of third-party contact would be changed to 60 days.
- The National Taxpayer Advocate has included this proposal in its 2023 Purple Book: Compilation of Legislative Recommendations to Strengthen Taxpayer Rights and Improve Administration as Legislative Recommendation #62.
Full text of the legislation can be found here.