Scott Introduces Legislation to Protect American Taxpayers

WASHINGTON – U.S. Senator Tim Scott (R-S.C.), Finance Committee Ranking Member Mike Crapo (R-Idaho), and their Republican colleagues, introduced the IRS Accountability and Taxpayer Protection Act to prohibit the IRS from using penalties as a bargaining chip in reaching resolutions more favorable to the agency at the expense of hardworking Americans.

“There’s a reason the bipartisan Joint Committee on Taxation predicts that the largest percent increase in tax burden will fall on families with the lowest incomes as a result of the Democrats’ tax agenda last Congress – it’s because the IRS focuses its auditing efforts on those with the fewest resources to resist,” said Senator Scott. “When an IRS agent comes knocking on the door of the wealthy, they’re met with lawyers and legal fees; however, working-class Americans aren’t afforded this luxury. I won’t stand for President Biden and congressional Democrats shaking down the American middle class to pay for their radical, socialist agenda, and I encourage the Senate to take up my legislation to provide meaningful protections for hard-working people.

“With an additional $80 billion in IRS funding, $45 billion of which is reserved for enforcement, the IRS has new and unprecedented resources available to levy penalties against taxpayers,” said Senator Crapo.  “Senator Scott’s sensible legislation is an important counter-balance that ends years of needless litigation by establishing something we need more of: clear and simple tax rules.  The most important part of this legislation is it is a taxpayer favorable law that helps ensure the IRS will only impose penalties where appropriate and not as a bargaining chip.  I look forward to working with my colleagues to create better ways to protect taxpayers and hold the IRS accountable.”

“The bloated IRS budget shouldn’t be used to bully the hardworking people of Wyoming into paying penalties to settle issues with the IRS,” said Senator Cynthia Lummis (R-Wyo.). “The IRS Accountability and Taxpayer Protection Act will hold the IRS accountable and ensure people in Wyoming are protected from unnecessary overreach by the supersized IRS.”

“The IRS has been a massive burden on the American people for decades, and under the Biden administration, it has expanded its size and empowered enforcement agents to bully Americans into settlements under the threat of financial penalties,” said Senator Jim Risch (R-Idaho). “To strengthen taxpayer protections amid growing threats from the IRS, Senators Tim Scott, Mike Crapo, and I introduced the IRS Accountability and Taxpayer Protection Act.”

“Democrats are hiring 87,000 IRS agents with a clear mandate to ramp up audits on taxpayers. Democrats unleashed this beefed-up IRS on the public without including any additional protections for taxpayers. Zero. Sen. Scott’s bill ensures the IRS can’t intimidate taxpayers into settling by threatening unjust penalties. Taxpayers need more protection from the IRS, not less. Every lawmaker should support Sen. Scott’s bill and I applaud his leadership,” said Grover Norquist, President of Americans for Tax Reform.

“In the 1998 IRS Restructuring and Reform Act, Congress spoke with a clear bipartisan voice that the IRS’s penalty authority must be sensibly balanced with the rights of taxpayers. This provision of the law has recently come under attack, endangering the hard-won protections that so many honest Americans depend upon in legitimate disputes with the IRS. Senator Scott deserves the gratitude of millions of taxpayers for recognizing the importance of this little-known but vital safeguard, and the need to strengthen it. His legislation gives hope to everyday taxpayers who follow the rules that the IRS will do the same. NTU is proud to support Senator Scott’s bill, as should every lawmaker in both parties,” said Pete Sepp, President of the National Taxpayers Union.

The IRS Accountability and Taxpayer Protection Act is cosponsored by Senators John Barrasso (R-Wyo.), Marsha Blackburn (R-Tenn.), Mike Braun (R-Ind.), Tom Cotton (R-Ark.), Mike Crapo (R-Idaho), Cynthia Lummis (R-Wyo.), Roger Marshall (R-Kansas), Jim Risch (R-Idaho), and Roger Wicker (R-Miss.).

Background:

Of the $80 billion in additional IRS funding appropriated by Congressional Democrats, approximately $45 billion is reserved for “enforcement.” With the IRS’s workforce growing by 45% by fiscal year 2025, American taxpayers need additional protections.  

The IRS Accountability and Taxpayer Protection Act would strengthen an essential taxpayer protection (IRC §6751(b)) by removing the language creating significant litigation and replacing it with a clear rule. This rule would require the IRS to verify penalties for accuracy rather than using them as a way to manipulate taxpayers to settle.

Americans for Tax Reform and the National Taxpayers Union endorse this legislation. 

Full text of the IRS Accountability and Taxpayer Protection Act can be found here.