What This Bill Does
This bill directs the IRS to reduce improper tax payments (credits or refunds that should not have been made or were made in wrong amounts). The bill requires the IRS to set annual targets for reducing these payments and to publicly report on their progress toward those goals.
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Who It Affects
Internal Revenue Service (IRS) officials and employees, the Secretary of the Treasury, the Treasury Inspector General for Tax Administration, Congress, and taxpayers who receive IRS payments.
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Key Provisions
- The Secretary of the Treasury must establish annual targets for reducing improper tax payments within 90 days of the bill becoming law (Sec. 4(a)).
- The IRS must publish information online about improper tax payments including the official responsible, payment rates and amounts, historical data, and annual reduction targets within 180 days and every year after (Sec. 4(b)).
- The IRS must designate one official to be accountable for meeting the reduction targets without harming taxpayer services within 120 days (Sec. 5(a)).
- That official must submit annual reports to Congress and the Office of Management and Budget describing the methodology, plans to meet targets, and how services will be protected (Sec. 5(b)).
- The Treasury Inspector General for Tax Administration must assess the risk of improper payments and recommend changes within 60 days of receiving the annual report (Sec. 5(c)).
- The Secretary of the Treasury must develop policy recommendations and potential new laws to reduce improper payments within 180 days (Sec. 6(a)).
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What Changes
If this becomes law, the IRS will be required to publicly report on improper payments and their efforts to reduce them. An IRS official will be held accountable for meeting reduction targets. Congress will receive annual reports detailing progress and plans. The Treasury Inspector General will review these efforts and make recommendations.
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Important Definitions
"Improper tax payment" means any credit or refund of an overpayment of taxes that should not have been made or that was made in an incorrect amount (Sec. 3).
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II
118TH CONGRESS
1ST SESSION
S. 1054
To reduce improper payments and eliminate waste in Federal programs,
and for other purposes.
IN THE SENATE OF THE UNITED STATES
MARCH 29, 2023
Mr. BRAUN introduced the following bill; which was read twice and referred
to the Committee on Homeland Security and Governmental Affairs
A BILL
To reduce improper payments and eliminate waste in Federal
programs, and for other purposes.
Be it enacted by the Senate and House of Representa-
1
tives of the United States of America in Congress assembled,
2
SECTION 1. SHORT TITLE.
3
This Act may be cited as the ‘‘IRS Improper Pay-
4
ments Act’’.
5
SEC. 2. FINDINGS AND PURPOSE.
6
(a) FINDINGS.—Congress finds that when the Inter-
7
nal Revenue Service makes payments to taxpayers, the In-
8
ternal Revenue Services must make every effort to confirm
9
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•S 1054 IS
that the right recipient is receiving the right payment for
1
the right reason at the right time.
2
(b) PURPOSE.—The purpose of this Act is to—
3
(1) reduce improper tax payments by the Inter-
4
nal Revenue Service—
5
(A) by intensifying efforts to eliminate
6
payment error, waste, fraud, and abuse; and
7
(B) by continuing to ensure that the Inter-
8
nal Revenue Service provides accessible tax-
9
payer services;
10
(2) adopt a comprehensive set of policies, in-
11
cluding—
12
(A) transparency of significant improper
13
tax payments; and
14
(B) accountability for reducing improper
15
tax payments; and
16
(3) protect taxpayer services.
17
SEC. 3. IMPROPER TAX PAYMENT DEFINED.
18
For purposes of this Act, the term ‘‘improper tax
19
payment’’ means any credit or refund of an overpayment
20
of a tax imposed under the Internal Revenue Code of 1986
21
that should not have been made or that was made in an
22
incorrect amount.
23
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SEC. 4. TRANSPARENCY.
1
(a) IN GENERAL.—Not later than 90 days after the
2
date of enactment of this section, the Secretary of the
3
Treasury shall establish, in coordination with the Commis-
4
sioner of Internal Revenue, annual targets for reducing
5
improper tax payments made by the Internal Revenue
6
Service.
7
(b) PUBLISHED INFORMATION.—
8
(1) IN
GENERAL.—Not later than 180 days
9
after the date of enactment of this section, and an-
10
nually thereafter, the Secretary of the Treasury shall
11
publish on the internet information about improper
12
tax payments made by the Internal Revenue Service.
13
(2) CONTENTS.—The information published
14
under paragraph (1) shall include, subject to Fed-
15
eral privacy policies and to the extent permitted by
16
law—
17
(A) the name of the accountable official
18
designated under section 5(a);
19
(B) rates and amounts as of the date of
20
enactment of this section, and historical rates
21
and amounts, of improper tax payments made
22
by the Internal Revenue Service, including, if
23
known and appropriate, the causes of the im-
24
proper tax payments;
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•S 1054 IS
(C) rates and amounts as of the date of
1
enactment of this section, and historical rates
2
and amounts, of the recovery of improper tax
3
payments (estimated on the basis of applicable
4
samples where appropriate); and
5
(D) the annual targets for reducing im-
6
proper tax payments.
7
(c) METHODOLOGY.—The methodology used for iden-
8
tifying and measuring improper tax payments under this
9
section
shall
meet
the
requirement
of
section
10
3352(c)(1)(A) of title 31, United States Code.
11
(d) LINKS.—The Commissioner of Internal Revenue
12
shall prominently display on the homepage of the website
13
of the Internal Revenue Service a link to internet-based
14
resources for addressing improper tax payments, including
15
the information published under subsection (b)(1).
16
SEC. 5. ACCOUNTABILITY AND COORDINATION.
17
(a) ACCOUNTABLE OFFICIALS.—Not later than 120
18
days after the date of enactment of this section, the Com-
19
missioner of Internal Revenue shall designate an official
20
to be accountable for meeting the reduction targets under
21
section 4(a) without unduly burdening taxpayer services.
22
(b) REPORT.—
23
(1) IN
GENERAL.—Not later than 180 days
24
after the date of enactment of this section, and an-
25
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•S 1054 IS
nually thereafter, the official who is designated
1
under subsection (a) shall provide the Director of
2
the Office of Management and Budget and the ap-
3
propriate congressional committees a report that in-
4
cludes—
5
(A) the methodology used for identifying
6
and measuring improper tax payments under
7
section 4(c);
8
(B) the plans for meeting the reduction
9
targets under section 4(a); and
10
(C) the plans and supporting analysis for
11
ensuring that initiatives undertaken in accord-
12
ance with this title do not unduly burden tax-
13
payer services.
14
(2) APPROPRIATE
CONGRESSIONAL
COMMIT-
15
TEES.—For purposes of paragraph (1), the term
16
‘‘appropriate congressional committees’’ means the
17
Committee on Finance of the Senate and the Com-
18
mittee on Ways and Means of the House of Rep-
19
resentatives.
20
(c) DUTIES
OF INSPECTOR GENERAL.—Not later
21
than 60 days after the date on which the annual report
22
required under subsection (b) is submitted, the Treasury
23
Inspector General for Tax Administration shall—
24
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(1) assess the level of risk for improper tax
1
payments by the Internal Revenue Service;
2
(2) determine the extent of oversight warranted
3
(in addition to oversight requirements under section
4
3353 of title 31, United States Code); and
5
(3) provide the Commissioner of Internal Rev-
6
enue with recommendations, if any, for modifying
7
the methodology, improper tax payment reduction
8
plans, or taxpayer services.
9
(d) AGENCY FAILURE.—
10
(1) IN
GENERAL.—If the Internal Revenue
11
Service does not demonstrate an improvement in re-
12
ducing improper tax payments, fails to develop a
13
plan to meet reduction targets under subsection
14
(b)(1)(B), or fails to implement the plans described
15
in subsection (b)(1)(C) for not less than 2 consecu-
16
tive years, the official designated under subsection
17
(a) shall submit to the Commissioner of Internal
18
Revenue, the Treasury Inspector General for Tax
19
Administration, and the Chief Financial Officer of
20
the Internal Revenue Service a report that—
21
(A) describe the likely causes of the lack or
22
improvement or failure; and
23
(B) proposes a remedial plan.
24
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•S 1054 IS
(2) REVIEW.—Annually, the Commissioner of
1
Internal Revenue shall, with respect to a remedial
2
plan proposed under paragraph (1)(B)—
3
(A) review the remedial plan; and
4
(B) in consultation with the Treasury In-
5
spector General for Tax Administration and
6
Chief Financial Officer of the Internal Revenue
7
Service, forward the remedial plan and any ad-
8
ditional comments and analysis to the Director
9
of the Office of Management and Budget.
10
SEC. 6. POLICY PROPOSALS.
11
(a) IN GENERAL.—Not later than 180 days after the
12
date of enactment of this section, the Secretary of the
13
Treasury, in consultation with the Commissioner of Inter-
14
nal Revenue and the Treasury Inspector General for Tax
15
Administration, shall develop policy recommendations, in-
16
cluding potential legislative proposals, designed to reduce
17
improper tax payments, including improper tax payments
18
caused by error, waste, fraud, and abuse, made by the In-
19
ternal Revenue Service.
20
(b) INCLUSION.—The recommendations developed
21
under subsection (a) shall be included, as appropriate, in
22
the budget of the President under section 1105(a) of title
23
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•S 1054 IS
31, United States Code, for fiscal year 2024 and each fis-
1
cal year thereafter.
2
Æ
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