H.R.2782 - Small Business Taxpayer Bill of Rights Act of 2025 (119th Congress)
Summary
H.R.2782, the Small Business Taxpayer Bill of Rights Act of 2025, aims to provide enhanced protections and rights to small businesses in their dealings with the IRS. The bill includes provisions such as modifying standards for awarding costs and certain fees, allowing civil damages for reckless or intentional disregard of internal revenue laws, and increasing penalties for certain offenses by IRS officers and employees. It also addresses issues like ex parte discussions, the right to an independent conference, alternative dispute resolution procedures, and limitations on enforcing liens against principal residences.
Expected Effects
The bill is likely to reduce the burden and costs associated with tax disputes for small businesses. It also aims to increase accountability and transparency within the IRS. The changes could lead to a more equitable and efficient tax system for small businesses.
Potential Benefits
- Allows small businesses to recover costs in tax disputes without net worth limitations.
- Increases the amount of damages recoverable for IRS misconduct, incentivizing better behavior.
- Provides small businesses with more avenues for dispute resolution, including independent mediation.
- Limits the IRS's ability to raise new issues during appeals, protecting businesses from shifting arguments.
- Protects principal residences from tax liens unless specific conditions are met.
Potential Disadvantages
- Increased damage awards could potentially lead to frivolous lawsuits against the IRS.
- The cost of independent mediators will be shared with the IRS, potentially increasing administrative costs.
- Some provisions may add complexity to the tax resolution process.
- Inflation adjustments may not keep pace with actual economic changes.
- The bill's benefits are primarily targeted at small businesses, potentially creating disparities with individual taxpayers.
Constitutional Alignment
The bill aligns with the principles of due process and equal protection under the law, as it seeks to provide fairer treatment for small businesses in tax matters. The provisions related to penalties and damages could be seen as reinforcing the government's accountability, consistent with constitutional principles. The bill does not appear to infringe on any specific constitutional rights or provisions.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).