National Taxpayers Union President Pete Sepp on Thursday commended the passage of the Math and Taxpayer Help (MATH) Act that is on its way to the President’s desk to be signed into law after unanimous passage by the Senate this week and House passage earlier this year.
The MATH Act will bring much needed reform to “math error” notices, which are among the most common notices taxpayers receive from the IRS.
“It is a very encouraging sign that in the middle of a shutdown, probably the most partisan environment imaginable, the Senate came together through unanimous consent to pass legislation that will deliver real relief for taxpayers facing confusing IRS notice procedures. Here’s hoping both chambers build on this momentum to keep enacting more elements of the Taxpayer Assistance and Service Act,” Sepp said
National Taxpayers Union strongly endorsed the legislation when it was introduced last Congress in the Senate by Senators Elizabeth Warren (D-MA) and Bill Cassidy (R-LA) with a companion bill introduced in the House of Representatives by Representatives Randy Feenstra (R-IA-04) and Brad Schneider (D-IL-10). The MATH Act was reintroduced this Congress and its reforms were also included in the Senate Finance Committee’s bipartisan discussion draft of the Taxpayer Assistance and Service Act.
The IRS is currently allowed to resolve what it believes are math errors and adjust a taxpayer’s amount of tax owed after providing written notice of the proposed change allowing 60 days for the taxpayer to respond. Instead of providing specific information about the calculation in question, math error notices are often vague and may list multiple potential reasons for the change. In many cases, the “math error” is not a simple matter of a taxpayer subtracting where he should have added; substantive questions about major items on the return could be at issue.
The MATH Act would require notices to identify the line item in question and describe the error in plain language and would require notices to include the respond-by date in bold text along with the telephone number taxpayers can use to contact the IRS. Additionally, it would require the IRS to notify taxpayers of abatement determinations and require the Secretary of the Treasury to provide additional procedures for requesting an abatement of a math error adjustment.
Last year, National Taxpayers Union Foundation called for math error notice reforms alongside a bipartisan advisory body of experts convened through the Taxpayers for IRS Transformation (Taxpayers FIRST) project. In its flagship report on taxpayer rights, Taxpayers FIRST highlighted that the vague and confusing nature of math error notices violates taxpayers’ right to be informed. The group of project advisors suggested that both the IRS and Congress revisit existing notice policies and incorporate the types of changes included in the MATH Act.