THE ISSUE
When US taxpayers make a math or clerical error on their tax returns, the Internal Revenue Service sends them a notice correcting their mistake and specifying the resulting change in their refund or tax liability.
These notices are fairly common: The IRS reported sending out more than 1 million of them to taxpayers for the 2023 tax year, an increase from more than 700,000 the previous tax year.
But the letters have drawn complaints from a bipartisan group of lawmakers as well as the independent taxpayer advocate within the IRS. They argue that the notices don’t contain enough information or make clear that taxpayers have a limited amount of time to contest the IRS’ proposed adjustments.
THE BOND
Though work has largely ground to a halt on Capitol Hill during the government shutdown, the Senate did manage to pass a bill last week designed to make it easier for taxpayers to understand the errors the IRS finds in their returns and their rights.
The bill from Sens. Elizabeth Warren, D-Mass., and Bill Cassidy, R-La., called the IRS Math and Taxpayer Help Act, would require these notices to include clear descriptions of the errors; to compute the adjustments; and to specify the deadline for challenging them.
“When trying to make government work better for people, I look for good partners wherever I can find them,” Warren told Semafor in a statement. “It’s just common sense that the IRS would break down math errors for taxpayers and tell taxpayers what their rights are.”
The measure passed the Senate by unanimous consent last week, after clearing the House in a voice vote in March (both actions signal broad support for the policy). The House measure was co-sponsored by Reps. Randy Feenstra, R-Iowa, and Brad Schneider, D-Ill., both of whom are members of the Ways and Means Committee, which oversees tax policy legislation.
It’s unclear when President Donald Trump will sign the bill into law, but he’s expected to do so; the White House didn’t respond to a request for comment by press time.
Step Back
This isn’t the only piece of legislation the bipartisan Senate pair has worked on. Cassidy and Warren, who both sit on the Senate Finance Committee, also cosponsored a bill together that would create a federal system for tracking outcomes for college students after they graduate.