CCAGW Urges S. 3278 Provisions be Included in Final IRS Reform Package

November 28, 2018

The Honorable Mitch McConnell               The Honorable Paul Ryan
Majority Leader                                        Speaker
United States Senate                                United States House of Representatives
Washington, D.C. 20510                          Washington, D.C. 20515

The Honorable Orrin G. Hatch                   The Honorable Kevin Brady
Chairman, Committee on Finance             Chairman, Committee on Ways and Means
United States Senate                                 United States House of Representatives
Washington, D.C. 20510                            Washington, D.C. 20515

The Honorable Ron Wyden                       The Honorable Richard Neal
Ranking Member, Committee on Finance Ranking Member, Committee on
United States Senate                                 Ways and Means
Washington, D.C. 20510                           United States House of Representatives
                                                                 Washington, D.C. 20515

Dear Majority Leader McConnell, Speaker Ryan, Chairman Hatch, Chairman Brady, Ranking Member Wyden, and Ranking Member Neal:

On behalf of the more than one million members and supporters of the Council for Citizens Against Government Waste (CCAGW), I urge you to include provisions from S. 3278, the Protecting Taxpayers Act, in any final Internal Revenue Service (IRS) reform package that you consider before the end of this Congress.

As a member of the Coalition for Effective and Efficient Tax Administration (CEETA), CCAGW is concerned with ensuring taxpayers’ rights to administrative appeals before being forced into Tax Court; safeguarding the issuance of designated summonses; and, prohibiting the IRS from retaining outside counsel to participate and take witness testimony in a tax audit. CCAGW urges you to adopt language from S. 3278, which would provide taxpayers a statutory general right to an appeal, except in cases of frivolous tax positions or when certain processes have been put in place. Access to IRS appeals benefits both the taxpayer and the IRS by allowing the parties to seek a mutually agreeable resolution of tax issues before engaging in costly and time-consuming litigation that may be wholly unnecessary.

While S. 3278 does not define “designated for litigation,” which would afford the IRS’s discretion to deny a taxpayer’s access to appeals, it does impose on the IRS a series of necessary requirements to ensure there is appropriate written justification and notification of a matter’s “designation.” The IRS would be required to base a “designation” determination on a joint written recommendation of the commissioner and division counsel of the relevant IRS operating division, made in consultation with the appropriate associate chief counsel. S. 3278 would also require the IRS to notify a taxpayer in writing of the reason for a matter’s designation for litigation before and after a recommendation for designation.

CCAGW also supports provisions in S. 3278 that would modify current authority to issue a designated summons, which allows the IRS unilaterally to toll the statute of limitations. S. 3278 would require written approval of the issuance of the designated summons by the Large Business and International Division commissioner and division counsel. The bill would also require that the Treasury Secretary establish that the taxpayer was uncooperative with reasonable requests for witnesses, documents, meetings, and interviews.

The Protecting Taxpayers Act will give taxpayers much-needed certainty for tax administration issues. Again, on behalf of the members and supporters of CCAGW, I urge you to include the suggested language from S. 3278 in any tax reform package being considered prior to the end of this Congress.

Sincerely,

Tom Schatz
President, CCAGW

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