The House Ways and Means Committee of the United States Congress announced on Tuesday (November 18) the passing of the Tax Court Improvement Act, H.R. 5349, aimed at protecting taxpayers in tax disputes, ensuring fair treatment, and preventing undue penalties from the Internal Revenue Service (IRS) while enhancing transparency and accountability.
This bill, jointly proposed by Representatives Nathaniel Moran of Texas’s first district (Republican) and Terri Sewell of Alabama’s seventh district (Democratic), seeks to ensure taxpayers have timely pre-trial evidence disclosure in tax court and hold tax judges to the same accountability standards as other federal judges.
Under the provisions of the bill, the Tax Court is authorized to issue subpoenas to the IRS before hearings, requiring the submission of books, documents, electronic storage information, or physical items for evidence disclosure or presenting evidence.
Additionally, the bill mandates that Tax Court judges adhere to the same recusal standards as other federal judges to improve the efficiency of judicial review, ensuring courtroom proceedings and other procedures are safe and civilized.
This legislation is part of a series of bills promoted by the House Ways and Means Committee to enhance tax management. The House has not yet scheduled a date for a full chamber vote on the bill.
Moreover, Representative Glenn Grothman of Wisconsin’s sixth district (Republican) introduced the Fair and Accountable IRS Reviews Act, H.R. 5346, requiring written approval from a direct supervisor for any tax personnel proposing fines for individuals or businesses.
Both proposals have gained bipartisan support in the House Ways and Means Committee, with many organizations advocating for taxpayer and small business interests loudly endorsing these common-sense safeguard measures.
Karen Kerrigan, President and CEO of the Small Business and Entrepreneurship Council, stated, “This important legislation will promote fairness, alleviate the complexity and costs faced by small businesses in tax disputes. Simplifying procedures and expediting decisions will modernize the operation of the Tax Court, reducing barriers while upholding due process.”
She further emphasized, “The H.R. 5346 bill will ensure proper supervision and review of fine decisions affecting small business owners, guarding against hasty, biased, or inappropriate enforcement actions.”
David Williams, Chairman of the Taxpayers Protection Alliance, also expressed, “The Tax Court Improvement Act will ensure the US Tax Court operates with the independence and fairness taxpayers deserve, enabling individuals who cannot afford expensive legal representation to present their case fairly and resolve disputes efficiently.”
The US Tax Court is a federal court established by Congress under Article I of the Constitution, dedicated to hearing federal income tax disputes, typically intervening before the IRS formally determines tax amounts. It serves as the sole judicial channel for taxpayers to initiate tax litigation without the need to prepay the entire disputed tax amount.