The Honorable John CornynU.S. SenateWashington, DC 20510
Dear Senator Cornyn:
On behalf of the 362,000-member National Taxpayers Union (NTU), I write in strong support of S. 725, your “Small Business Taxpayer Bill of Rights Act of 2013.” Through the introduction of this legislation, you have earned the sincere gratitude of taxpayers for recognizing the need to reform the administrative facets of the tax laws, not just the rates and the base.
As you know, NTU has occupied a fundamental role in the development of taxpayer rights legislation during the past several decades. Throughout the 1980s our advocacy efforts brought IRS “horror stories” to light, which contributed to the development of the first Taxpayer Bill of Rights in 1988. Our former Executive Vice President David Keating served on the National Commission on Restructuring the IRS, whose recommendations became the basis for the IRS Restructuring and Reform Act (RRA) of 1998.
Fifteen years after RRA’s passage, Congress has amassed a considerable body of experience and advice on potential improvements from sources such as the National Taxpayer Advocate, professional practitioners, and small businesses themselves. Your legislation skilfully incorporates this input, as well as a great deal of foresight into how future tax administration maladies can be avoided. We are especially enthusiastic over provisions such as:
- Creating an Alternative Dispute Resolution program for audits that will permit neutral third-party mediation in a cost-effective manner. Meanwhile, small case procedures and access to installment agreements without fees would both be expanded, thereby providing taxpayers with more low-cost options for solving tax problems.
- Strengthening safeguards against taxpayer abuses such as a ban on ex parte communications between IRS case employees and appeals officers, and a prohibition on new issues being raised during a taxpayer’s appeal process.
- Providing more avenues for redress when the IRS recklessly or intentionally disregards the law, including increases in the cap on damages and more options to recover attorney fees.
- Delivering additional opportunities for spousal relief, such as more time for filing petitions and clarifying that Tax Courts must follow applicable appellate procedures when reviewing such petitions. NTU has long sought more equitable tax treatment for “innocent spouses” (usually divorced) who are wrongfully being pursued as “responsible and willful” parties to tax controversies involving the other spouse. S. 725 makes important updates to this area of law.
- Setting appropriate remedies for misbehavior of IRS officials, including higher penalties for extortion, fraud, or bribery, and higher obtainable damage amounts for unlawful disclosures of tax return information.
In the American system of government, effective enforcement of tax laws cannot depend solely on harsh threats of punishment or intricate surveillance of all financial transactions. Rather, it must be balanced against the means to help the public voluntarily comply with the laws – and, protections to reassure the public that legitimate grievances with tax administrators will be resolved fairly and impartially. The Small Business Taxpayer Bill of Rights thoughtfully addresses this balance.
As an active participant in the drafting process of this legislation during the current Congress and the previous one, we can confidently attest to the care with which S. 725 has been constructed. The result is the next evolutionary step in the evolution of RRA ’98. The Senate should therefore act on this well-informed, non-controversial legislation without reservation.
NTU looks forward to working with you and your colleagues in enlisting cosponsors for this legislation and guiding it to enactment. Roll call votes in favor of S. 725 will be included in NTU’s annual Rating of Congress as pro-taxpayer votes. Again, we thank you for your diligence and attention to the often overlooked procedural dimensions of our tax law.Sincerely,Pete SeppExecutive Vice President