To: Members of the Senate Finance Committee
From: National Taxpayers Union
Date: July 28, 2026
Subject: NTU’s Views on July 30 Committee Markup
I. Introduction and Key Taxpayer Considerations
On behalf of National Taxpayers Union (NTU), America’s oldest national-level taxpayer advocacy organization, I write to offer our views on occasion of the markup of S. 3931, the Taxpayer Assistance and Service (TAS) Act. This legislation is easily the most consequential package of tax administration and taxpayer rights improvements to come before Congress since the Taxpayer First Act of 2019, and rivals in importance the IRS Restructuring and Reform Act of 1998.
II. NTU Support of the TAS Act at July 30 Markup
At least 23 elements of the TAS Act reflect NTU priorities, or reflect ideas for action developed under the Taxpayers for IRS Transformation project sponsored by NTU’s research arm, National Taxpayers Union Foundation.1
Having been actively involved in policy formation surrounding IRS matters for more than 50 years, enactment of S. 3931 is a top legislative priority for NTU. As such, the first order of business in this markup is ensuring swift bipartisan Committee approval of the legislation so that floor consideration may be scheduled in this session.
Many important provisions included in the legislation represent noncontroversial reforms to the way taxpayers exchange information with the IRS. The public expects a baseline level of expedient online access to information, a standard the private sector has met for decades but one the IRS rarely delivers. Technological upgrades included in this legislation would provide taxpayers with real-time information about call wait times, broader callback availability, and the option to view and respond to more information through online accounts. In addition, digitization of more correspondence should help IRS agents review and process information more efficiently and respond more quickly to taxpayer inquiries.
Equally critical to transparent and accessible exchange of information is taxpayers’ ability to challenge the IRS’s decisions in a fair and just tax system. S. 3931 includes several improvements to the judicial process to uphold protections promised by the Taxpayer Bill of Rights. The legislation expands the Tax Court’s pre-trial discovery power by empowering it to issue third-party subpoenas so that litigants can receive important information prior to hearings. It also affirms the Supreme Court decision in Boechler, P.C. v. Commissioner to allow the Tax Court to apply equitable tolling in unique circumstances, and provides options for taxpayers who currently cannot access the Tax Court in certain collection due process cases or in suits for refunds or credits.
The legislation takes a thoughtful approach to addressing challenges faced by underserved taxpayers. With the U.S. being one of the only countries in the world with citizenship-based taxation, taxpayers abroad face a highly complex tax system with limited assistance available to them. S. 3931 paves a path for future legislation by requiring the Secretary of the Treasury to suggest simplifications to Congress after consulting with the National Taxpayer Advocate and U.S. citizens abroad.
NTU and others have championed these reforms for years, yet the IRS has made little progress on its own. It is clear that these legislative mandates, among others discussed below, are required to compel change.
While taxpayers would applaud passage of S. 3931 “as is,” members of the Committee may wish to make technical adjustments to the bill reflecting recent events at the IRS as well as action on provisions of the TAS Act in the House of Representatives. NTU also wishes to offer some additions and modifications to S. 3931 that are intended to maximize the legislation’s salutary impact while minimizing delays or controversies that could impede consensus on passage. We therefore commend your attention to the following:
Comments
Title I. We are highly supportive of virtually all of the provisions in the first title of this legislation. Most of these are good government proposals that would improve the customer experience when interacting with the IRS.
One section that directly reflects this overall goal of improving customer service is Section 105: Expansion of Online Accounts. This provision would require the Service to upgrade online accounts so both taxpayers and their representatives can view up to six years worth of previous returns, notices, and correspondence, as well as respond to IRS inquiries online. This seems like a provision that should not require a bill to ensure implementation, but it does. This small provision will save many hours of taxpayer and tax preparer time when filing and reviewing returns.
In 2025, when the TAS Act was still in discussion draft form, NTU noted that provisions to strengthen the requirement that IRS supervisors affirmatively approve the imposition of penalties needed reinforcing, and provided background in support of such action:
NTU strenuously advocated for Section 6751(b) of the tax law (enacted in RRA ’98) requiring direct supervisor approval for tax penalties proposed by lower-level workers and managers. The purpose was not only to provide a pro-taxpayer safeguard to prevent the IRS from using penalties as bargaining chips, but to also create a trail of documentation that would benefit both taxpayers and the government in collection due process situations. NTU would argue that the IRS has acted in bad faith toward Section 6751(b). The fact that a proposal to gut 6751(b) in a previous Congress was “scored” as a $1.4 billion revenue raiser2 further emphasizes what we believe to be widespread disrespect at the IRS for the intent and letter of the law.
We are greatly encouraged by the Committee’s addition of NTU-recommended language in Section 112 of S. 3931 instructing the IRS to develop an electronic form for supervisor approval, defining who may sign such a form for it to be valid, and when the supervisor consent must be obtained. Without these key details, we believe the Committee’s admirable effort to provide accountability for penalties could come to naught.
NTU urges the Committee to avoid any changes to Section 112 during markup that would weaken, delay, or otherwise alter this provision to the detriment of taxpayers.
We would also recommend that the Committee consider a revision that could make Section 112 function even more effectively. Closely related to the supervisor signature requirement for penalties is the need for protection during the issuance of a Statutory Notice of Deficiency. In numerous cases involving all types of financial situations, NTU has become increasingly concerned that notices of deficiency are, like penalties, being wielded as tools of intimidation against taxpayers. This can occur in situations where an exam has dragged on for an extended period of time and has raised dubious or unclear issues.
NTU urges the Committee to add an electronic signature requirement, from the “Chief” level of the appropriate division, to issue a notice of deficiency in situations where an examination is initiated when the statutory limit for doing so is close to being reached. The trigger could be for notices of deficiency in cases where an exam has been commenced within 120, 180, or even 270 days for the statute of limitations for the applicable tax year. And, like the original Section 105 of the TAS Act discussion draft (since signed into law as the IRS MATH Act), the content of the notice of deficiency should be improved to clearly explain the legal precepts, facts, and rational basis for the government’s determination.
NTU is also truly gratified that S. 3931 has been enhanced from the discussion draft in Section 115 to include clarification that Section 4022 (a) of the IRS Restructuring and Reform Act requires compilation and publication of a separate annual report identifying sources of complexity in the Tax Code. Since 1999, NTU’s research arm has conducted a survey of tax law complexity that has tracked an alarming rise in burdens on taxpayers. This year’s report determined that Americans spent $6.93 billion hours and $476.8 billion in time and out-of-pocket costs to comply with federal tax laws.3 Unfortunately, this study must rely on incomplete sources of data without the benefit of “inside knowledge” from tax administrators.
Thus, Section 4022 (a) of RRA ’98 is vital to involving the Executive Branch, which is charged with enforcing and administering laws, in the public policy process at its most important granular level. Without this regular input, Congress has less guidance for making technical corrections to tax laws and for avoiding patterns in future lawmaking that will likely result in similar administration problems. Only the Executive Branch can provide a more systematic, proactive evaluation of tax complexity as laws and regulations are implemented. When this evaluation is not forthcoming, the intent of both the Commission’s report and PL 105-206 is severely compromised.
According to the National Taxpayer Advocate of the Internal Revenue Service, the Service has issued just two annual reports compliant with the 1998 statute, but in both instances, “Congress adopted legislation to address each area of complexity referenced in the reports, and the IRS addressed the administrative problems they uncovered. Thus, the IRS’s decision to discontinue the reports has likely contributed to tax complexity.”4 The last report was published in 2002.
IRS staff members told the Taxpayer Advocate’s office that, since 2002, “resources gradually were transferred to focus on innovative analytics and away from the reports; and more and more of the statistics reported in the complexity report were made available in other ways.” The Taxpayer Advocate disagrees with the implications of this statement, and NTU would disagree as well. Again, the purpose of the annual report was to provide a single, working document that would serve as a basis of staff-level exchanges of views—perspectives that could inform tax policymaking going forward. Furthermore, the lack of an annual report deprives outside stakeholder organizations of a valuable reference tool they could use to discuss potential improvements in administration with elected and appointed officials.5
NTU urges the Committee to avoid any changes to Section 115 during markup that would weaken, delay, or otherwise alter this provision to the detriment of taxpayers.
Title V. In some policy quarters, the provisions contained in Section 504 have elicited concern over barriers to entry for individual paid preparers as well as the possibility of encouraging “ghost preparers” to ply their trades even further from legitimate oversight. NTU believes these concerns are well-intentioned, though they should be balanced against other mitigating factors. Poorly skilled or unscrupulous preparers can contribute to improper payments of refundable tax credits, representing a direct cost to taxpayers.6 Meanwhile, other IRS rulemakings, such as the ill-advised Circular 230 modifications of 2025, contemplate dangerous restrictions on how paid preparers interact with the government.7 We recommend that Congress act to prevent the IRS from moving forward on its 2025 Circular 230 proposals in any form.
This portion of the TAS Act is the product of much compromise. NTU has recommended that the proposed Continuing Education requirements be kept manageable and that Treasury should not be the sole arbiter of educational programs that meet those requirements. Other entities, such as the IRS Advisory Council or National Taxpayer Advocate, should have input. Also, NTU has pledged to be an “active participant and watchdog” in the implementation of Section 504.8
NTU urges Committee members to avoid modifications that would add to or expand the requirements of Section 504.
Title VI. For roughly a century, in one form or another, the Independent Office of Appeals has been intended to provide an avenue for taxpayers to resolve disputes with the IRS. And, for just as long, tax enforcers have acted to curtail the entity’s authority through rulemakings (such as a 2022 rulemaking to codify 24 appeal exceptions)9 as well as undermine congressional intent in laws such as RRA ‘98 and TFA. This flagrant disregard for taxpayer rights must be met with as firm a response as possible.
Accordingly, NTU urges the Committee to align Section 601 with the provisions of H.R. 8134, the Strengthen Taxpayer Rights Act of 2026. This bill, which has the endorsement of NTU as well as the National Taxpayer Advocate, would require taxpayer consent for any IRS employee other than one from the Independent Office of Appeals from participating in an appeals conference. NTU believes additional safeguards should be provided to this language. Written taxpayer consent should also be required before the Independent Office of Appeals can seek advice from the assistance of the Office of the Chief Counsel. The content of the advice must be specified to the taxpayer. An additional approach would be that found in S. 1777 (117th Congress), which would have banned ex parte communications of all kinds between Appeals and the Chief Counsel’s office.
NTU also believes that the numerous concerns raised over the IRS’s 2022 rulemaking referred to above deserve a congressional response, especially in the area of constitutional and regulatory validity issues.
To reflect the spirit and the letter of lawmaking surrounding the Independent Office of Appeals, NTU urges the Committee to affirm in Section 605 that Appeals may consider constitutional or regulatory validity issues when evaluating hazards of litigation. We also urge the Committee to preserve a taxpayer’s right to appeal when a closing letter relates to the same issue, but is for a different tax year.
Title IX. One of the biggest challenges faced by self-employed Americans is tracking and paying what they owe in taxes. Independent contractors typically do not have taxes withheld from their income, unlike traditional wage earners. This can cause real problems for these taxpayers when tax season comes around. The companies they work with have to file form 100-NEC with the IRS, which provides the Service with data on income received by any gig worker who made more than $600 in a calendar year. This Title allows businesses to create voluntary tax withholding agreements with independent contractors, so they don’t get stuck with sticker shock come April 15. Withheld funds could then be used to pay what they owe in taxes, avoiding trouble with the IRS.
Title X. We applaud the inclusion of Section 1003 in the legislative text, which adds language protecting taxpayers from being enmeshed in anti-fraud enforcement proceedings if the taxpayer did not know about the fraud being perpetuated by their tax preparers. The language limits the statute of limitations on involved cases where the taxpayer did not engage or participate in the fraudulent activity. Currently, taxpayers who did nothing wrong themselves can be stuck in limbo for years, costing them thousands of dollars in legal and accounting fees.
III. Conclusion
Beyond S. 3931, one major, unfinished piece of business in the ongoing mission of encouraging sound tax administration is ongoing supervision of the IRS in the implementation of its strategic plans and other management initiatives. The IRS Restructuring and Reform Act created an Oversight Board10 of public and private sector experts for this purpose, whose quorum has unfortunately lapsed for some 15 years due to disputes over nominees. Before their retirement, your colleagues Rob Portman (R-OH) and Ben Cardin (D-MD) drafted a proposal to revitalize the Oversight Board with a new mechanism for ensuring that the entity would withstand political vicissitudes and function as intended. The benefits of this proposal, which was included in an early draft of what later became S. 5311, the IRS Customer Service and Transformation Act of 2022, are legion. From helping the Service navigate the use of AI to optimizing staff and budget allocations in challenging fiscal times, an Oversight Board would pay great dividends to both the government and taxpayers.
At minimum, NTU would urge Committee members to consider the Portman-Cardin Oversight Board proposal for reintroduction and markup in the near future.
Should Committee members have an interest in any of the specific additions NTU has highlighted above, we have prepared legislative language to guide you through the amendment process. Again, our aim is to foster bipartisan comity and expedite consideration of S. 3931 so that it may receive a floor vote as soon as possible.
Finally, Committee members should understand that strong support from the conservative community exists for the current version of S. 3931. A coalition of 16 organizations, led by NTU, wrote to Congress11 just one month ago exhorting lawmakers that “As the Senate Finance Committee approaches markup of S. 3931, we urge Committee Members to make adjustments and additions that exemplify a strong bipartisan consensus.” Signatories also noted the need for alacrity, warning that “Taxpayers should not be forced to wait for relief from many of the most egregious shortfalls in our system of tax administration.”
Today, all members of the Committee should seize the opportunity to fulfill this vision and advance S. 3931. While this bill does increase the deficit modestly, with a current 10 year JCT score of $388 million, the series of important reforms in this legislation will endure a smoother IRS experience for years to come. Toward this end, we are at your service. Thank you for your consideration.
IV. Contact Information
Should you have any questions about the recommendations in this memo, please do not hesitate to reach out to David Timmons (dtimmons@ntu.org).
1 For additional analysis of these vital upgrades to the IRS and the structure of taxpayer protections, see Debbie Jennings and Pete Sepp, “Taxpayer Assistance and Service Act Advances Long Overdue Reforms,” https://www.ntu.org/publications/detail/taxpayer-assistance-and-service-act-advances-long-overdue-reforms.
2 See Joe Bishop-Henchman, “House Dem Bill Would Allow Retroactive IRS Penalties,” https://www.ntu.org/foundation/detail/house-dem-bill-would-allow-retroactive-irs-penalties.
3 See Demian Brady, “The Hidden Cost of the Tax Code: 6.93 Billion Hours and More Than $477 Billion in Total Compliance Burdens,” https://www.ntu.org/foundation/detail/the-hidden-cost-of-the-tax-code-693-billion-hours-and-more-than-477-billion-in-total-compliance-burdens.
4 See IRS National Taxpayer Advocate, “Annual Report to Congress Report Card” (2014-2015), 2014 MSP Topic #9, pp. 45-49, https://www.taxpayeradvocate.irs.gov/wp-content/uploads/2020/08/2014-ARC_VOL-1_S1_MSP-9-508.pdf
5 Ibid, p. 45.
6 See Emily Wielk, “Improper Payments: Existing Challenges, Impact, and a Path Forward: The Earned Income Tax Credit and the Child Tax Credit,” https://bipartisanpolicy.org/wp-content/uploads/2024/12/BPC_Improper-Payments-EITC-CTC-Report_R04.pdf.
7 See Lindsey Carpenter, Joe Bishop-Henchman, and Pete Sepp, “U.S. Treasury and IRS Propose Changes That Could Harm Taxpayers,” https://www.ntu.org/foundation/detail/us-treasury-and-irs-propose-changes-that-could-harm-taxpayers.
8 See Debbie Jennings and Pete Sepp, “Taxpayer Assistance and Service Act Advances Long Overdue Reforms,” https://www.ntu.org/publications/detail/taxpayer-assistance-and-service-act-advances-long-overdue-reforms.
9 See Pete Sepp and Andrew Lautz, “NTU Offers Comments to IRS on Resolution of Federal Tax Disputes,” https://www.ntu.org/publications/detail/ntu-offers-comments-to-irs-on-resolution-of-federal-tax-disputes.
10 See Pete Sepp, “I’m the President of the National Taxpayers Union. Be Careful With I.R.S. Reform.” https://www.nytimes.com/2021/10/18/opinion/tax-irs-reform.html.
11 See “Congress Must Pass Taxpayer Assistance and Service Act to Fix Egregious IRS Shortcomings,” https://www.ntu.org/publications/detail/congress-must-pass-taxpayer-assistance-and-service-act-to-fix-egregious-irs-shortcomings.