Will the Taxpayer First Act change the way I file my 2020 taxes?

Of course, you haven’t had time to think about the Taxpayer First Act. If you’re like most business owners, you’ve been busy trying to make sure your business stays up and running. The good news is that the TFA didn’t include any sweeping economic changes like the Tax Cut and Jobs Act. Taxpayer First Act focuses primarily on making the IRS a kinder, gentler government agency.

The immediate changes are mostly administrative. The Taxpayer First Act is the government’s attempt at changing the IRS’s organizational and operational structures. They want the IRS to be more uniformly educated, more user-friendly, and more respectful. They also plan to provide the information you need in plain language or in relevant international languages.

Fortunately, the changes won’t require you to alter the way you manage your tax filings. At least not right away.

The Six Big Ideas

Most of the changes seem designed to smooth taxpayer relations, modernize IRS technology, and make taxpayers as happy as taxpayers can be. They have “Six Big Ideas” designed to make that happen.

• Proactive outreach and education
• Expanded digital services
• Seamless taxpayer experience
• Focused strategies for the underserved
• Ecosystem of partnerships
• Enterprise data analytics

What’s Important to You Now

As you review the specifics of each change, you’ll get the idea that the IRS wants to perform more like a business. It wants to treat people like actual customers or clients. The Balance explains it best in its article, “What is the Taxpayer First Act?” Federal legislators just want people to like the IRS. They’ve developed a number of short and long-term strategies to accomplish this goal. Here are just a few.

Pay the IRS with plastic

Up until now, you had to use a third-party payment service if you wanted to pay your taxes with a debit or credit card. That rule has changed. The IRS will now accept your plastic.

Identity theft education

If you’re on the phone and on-hold with the IRS you now hear messages about identity theft and tax scams. Earlier this year, the IRS also launched the resource, “Identity Theft Central.”

New procedures for misdirected tax refunds and deposits

The Taxpayer First Act requires the IRS to establish better reporting and recovery procedures for misdirected electronic fund transfers and tax refunds.

Expanded Digital Services

When the IRS completes its new online platform by January 1, 2023, it will offer resources for businesses to prepare, generate, and distribute 1099 forms. You can also maintain your taxpayer records online.

Updated tax preparer’s electronic filing requirement

The Taxpayer First Act gradually reduces your online tax filing requirements. It currently requires electronic filings for services that file fewer than 250 returns in a year. The requirement that gradually decreases to 10 returns after 2021.

Sensible Enforcement

The Taxpayer First Act calls for the IRS to reassess and clarify procedures related to asset seizure, interest tax exemptions on returned assets, joint liability equitable relief clarifications, private debt collectors, and other enforcement issues.

Electronic signatures

The Taxpayer First Act requires the IRS to develop uniform standards for tax preparation services that file using a clients’ power of attorney.

You Still Need Accurate Bookkeeping

No matter how user-friendly the IRS Becomes, you still have to give them accurate financial data. Contact Goode Bookkeeping and Consulting at (860) 968-2345 or complete our consultation form. We’ll schedule a free consultation and tell you more about our professional bookkeeping and back-office services.