Date: June 19, 2019
Senate Passes H.R. 3151, the
“Taxpayers First Act”
On June 13, 2019, the Senate passed, H.R. 3151, the Taxpayers First Act, without amendment by voice vote. This bill had previously passed the House on June 10, 2019, by voice vote, under suspension of the rules. The bill, among other things, would require the Internal Revenue Service (IRS) to notify individuals of employment-related identity theft, and the Social Security Administration (SSA) as necessary, to request annually such IRS employment-based identity theft information. Additionally, it would authorize IRS to lower the electronic wage reporting threshold. The bill now moves to the President for his action.
H.R. 3151 includes the following provisions of interest to SSA:
Section 1205. Private Debt Collection and Special Compliance Personnel Program
- Would prohibit the Secretary of the Treasury (the Secretary) from entering into qualified tax collection contracts1 to collect inactive tax receivables2 from individuals whose income consists substantially of SSA disability and Supplemental Security Income.
Section 2005. Identity Protection Personal Identification Numbers
- Would require the Secretary, upon request from any individual, to issue a number that may be used in conjunction with the individual’s Social Security Number (SSN) (or other identifying information for the individual, as determined by the Secretary) to assist the Secretary in verifying the individual’s identity.
- Would be effective for each calendar year after the date of enactment to individuals residing in such States as the Secretary determines appropriate, with national availability to all individuals residing in the United States no later than 5 years after the date of enactment.
Section 2006. Single Point of Contact for Tax-Related Identity Theft Victims
- Would require the Secretary to establish and implement procedures for a single point of contact at IRS for any individual whose tax return was delayed or otherwise adversely affected due to tax-related identity theft.
Section 2007. Notification of Suspected Identity Theft
- Would require the Secretary to notify individuals who have or may have been victims of employment-related identity theft. Such notification would include instructions on how to file a report with law enforcement and whether the Secretary has initiated an investigation, among other things.
- Would require the Secretary to review tax information (e.g., statements, tax returns), including wage reports provided to IRS by SSA, to determine whether employment-related identity theft may have occurred. Such information would indicate that the SSN provided on the wage report or tax return does not correspond with the name on either the 1) wage report or 2) tax return.
- Would amend section 232 of the Social Security Act to require the Commissioner of Social Security to request, at least annually, employment-related identity theft information from the IRS as may be necessary to ensure the accuracy of wage records maintained by SSA.
- Would apply to employment-related identity theft determinations made by the Secretary 6 months after enactment.
Section 2102. Internet Platform for Form 1099 Filings
- Would require the Secretary, no later than January 1, 2023, to develop a website or other electronic media for filing 1099s, similar to the functionality of SSA’s Business Services Online.
Section 2201. Disclosure of Taxpayer Information for Third-Party Income Verification
- Would require the Secretary to create an electronic, consent-based income verification system for its disclosures.
- The effective date would be no later than 1 year after the close of the 2-year period that beings on the first day of the 6th month after enactment.
Section 2301. Electronic Filing of Returns
- Would authorize (but not require) the IRS to lower its threshold for the electronic filing of returns, including information returns such as Form W-2. Under current law, IRS cannot require a person or employer to file returns electronically unless the person or employer files at least 250 returns each year. This provision would allow the IRS to lower this threshold from 250 to 100 in 2021, and from 100 to 10 beginning 2022.
Section 2302. Uniform Standards for the Use of Electronic Signatures for Disclosure Authorizations to, and other authorizations of, Practitioners
- Would require the Secretary to publish guidance to establish uniform standards and procedures to accept electronic signatures of taxpayers’ for disclosure of a taxpayer’s return or return information to a practitioner or any power of attorney granted by a taxpayer to a practitioner3.
- The effective date to publish guidance is no later than 6 months after enactment.
- Except as otherwise provided above, the provisions in this Act are effective upon enactment.
1 Qualified tax collection contract is further defined in 26 USC 6306 (b).
2 Inactive tax receivable is further defined in 26 USC 6306(c)(2)(A).
3 Practioner is any individual in good standing, regulated by the Department of Treasury under 31 USC 330.
HR 1957 and HR 3151 Section 2302 Electronic Signature Provision amendment to 26 USC 6061(b)
6061. Signing of returns and other documents
(a) General rule
Except as otherwise provided by subsection (b) and sections 6062 and 6063, any return, statement, or other document required to be made under any provision of the internal revenue laws or regulations shall be signed in accordance with forms or regulations prescribed by the Secretary.
(b) Electronic signatures
(1) In general
The Secretary shall develop procedures for the acceptance of signatures in digital or other electronic form. Until such time as such procedures are in place, the Secretary may-
(A) waive the requirement of a signature for; or
(B) provide for alternative methods of signing or subscribing,a particular type or class of return, declaration, statement, or other document required or permitted to be made or written under internal revenue laws and regulations.
(2) Treatment of alternative methods
Notwithstanding any other provision of law, any return, declaration, statement, or other document filed and verified, signed, or subscribed under any method adopted under paragraph (1)(B) shall be treated for all purposes (both civil and criminal, including penalties for perjury) in the same manner as though signed or subscribed.
(3) Published guidance
(A) IN GENERAL. - The Secretary shall publish guidance as appropriate to define and implement any waiver of the signature requirements or any method adopted under paragraph (1).
(B) ELECTRONIC SIGNATURES FOR DISCLOSURE AUTHORIZATIONS TO, AND OTHER AUTHORIZATIONS OF, PRACTITIONERS.—Not later than 6 months after the date of the enactment of this subparagraph, the Secretary shall publish guidance to establish uniform standards and procedures for the acceptance of taxpayers’ signatures appearing in electronic form with respect to any request for disclosure of a taxpayer's return or return information under section 6103(c) to a practitioner or any power of attorney granted by a taxpayer to a practitioner.
(C) PRACTITIONER.—For purposes of subparagraph (B), the term ‘practitioner’ means any individual in good standing who is regulated under section 330 of title 31, United States Code.”.