On January 30, 2025, a bipartisan group of US Senators released a discussion draft of the Taxpayer Assistance and Service Act ("TAS Act"), a taxpayer-friendly legislative proposal. Baker Botts previously discussed the TAS Act here. While it is uncertain whether the TAS Act will become law (and, if so, in what form) the enactment of the Act in its current form could provide streamlined and improved services and easier dispute resolution to taxpayers.
On May 8, 2025, the Tax Section of the American Bar Association (the "Tax Section") provided comments on the TAS Act. The Tax Section's comments are traditionally limited to technical and clarifying issues but provide some insight into the bill's substance.
The Tax Section supports the changes and amendments in the TAS Act and believes the bill will "allow the [Internal Revenue] Service to function more efficiently and make the Service, as well as the courts, more accessible to taxpayers." Among other changes, the Tax Section supports changes (i) expanding the Tax Court jurisdiction; (ii) improving notices of math or clerical errors; (iii) requiring the IRS to follow more rigorous procedures for certain penalties; and (iv) conforming FBAR requirements with foreign assert reporting on Form 8938. The Tax Section concluded that each of these changes, and others, would improve access to justice for taxpayers, improve the tax system's efficiency, or have other benefits.
However, the Tax Section provided several notes of caution regarding changes in the TAS Act. The Tax Section is concerned that the increased jurisdiction of IRS Appeals was not sufficiently expansive, as it would not allow IRS Appeals to consider the litigation hazards flowing from all challenges to the validity of IRS regulations. The Tax Section is likewise concerned that certain provisions expanding access to the Tax Court are insufficiently broad and that new limitations on IRS summons authority would be ineffective. The Tax Section proposed clarifying edits to the bill to address each of their concerns, which were generally modest.
In short, the Tax Section generally "applauds the discussion draft," including many of the sections that were not discussed in the comments. Baker Botts agrees with this positive view, and we have previously provided our insights into what we feel are the most notable changes to practice before the IRS and Tax Court in the TAS Act. Baker Botts believes the TAS Act, if passed, has significant potential to improve taxpayer interactions with the IRS, increase access to the Tax Court, and ensure that tax disputes are reviewed by an unbiased eye.
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