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Recommendations to Congress

The National Taxpayer Advocate is publishing the “2019 Purple Book”, a concise summary of 58 legislative recommendations that she believes would strengthen taxpayer rights  and improve tax administration. Most of the recommendations have been made in detail in prior reports, but others are presented in this book for the first time. These are offered as an aid to Congress as it considers taxpayer rights and IRS reform legislation in the coming year.

The Annual Report to Congress includes recommendations for new federal tax laws or changes to current ones. The National Taxpayer Advocate (NTA) places a high priority on working with the tax-writing committees in Congress. In addition to submitting legislative proposals in each Annual Report, the NTA meets regularly with members of Congress and their staffs, and testifies at hearings on the problems faced by taxpayers to give Congress an opportunity to receive and consider the taxpayer’s perspective.

Legislative Recommendations With Congressional Action

1
1.

IT MODERNIZATION: Provide the IRS with Additional Dedicated, Multi-Year Funding to Replace Its Antiquated Core IT Systems Pursuant to a Plan that Sets Forth Specific Goals and Metrics and Is Evaluated Annually by an Independent Third Party

2
2.

ADMINISTRATIVE APPEAL RIGHTS: Amend Internal Revenue Code Section 7803(a) to Provide Taxpayers With a Legally Enforceable Administrative Appeal Right Within the IRS Unless Specifically Barred by Regulations

3
3.

FIX THE FLORA RULE: Give Taxpayers Who Cannot Pay the Same Access to Judicial Review as Those Who Can

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4.

INNOCENT SPOUSE RELIEF: Clarify That Taxpayers May Raise Innocent Spouse Relief In Refund Suits

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5.

TAX COURT JURISDICTION: Fix the Donut Hole in the Tax Court’s Jurisdiction to Determine Overpayments by Non-Filers with Filing Extensions

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6.

INTERGOVERNMENTAL AGREEMENTS (IGAS): Amend Internal Revenue Code § 1474 to Allow a Period of Notice and Comment on New IGAs and to Require That the IRS Notify Taxpayers Before Their Data Is Transferred to a Foreign Jurisdiction Pursuant to These IGAs, Unless Unique and Compelling Circumstances Exist

7
7.

FOREIGN ACCOUNT REPORTING: Authorize the IRS to Compromise Assessed FBAR Penalties It Administers

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8.

TAX WITHHOLDING AND REPORTING: Improve the Processes and Tools for Determining the Proper Amount of Withholding and Reporting of Tax Liabilities

9
9.

INDIAN EMPLOYMENT CREDIT: Amend IRC § 45A to Make the Indian Employment Credit an Elective Credit for Employers Who Hire Native Americans

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10.

CHILD TAX CREDIT: Amend Internal Revenue Code § 24(c)(1) to Conform With § 152(c)(3)(B) for Permanently and Totally Disabled People Age 17 and Older