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The Taxpayer First Act of 2019 (TFA), signed into law on July 1, 2019, makes broad changes within the IRS. It includes changes to the IRS organizational structure, the tax debt collection process, and management of information technology systems. The overall goal is to improve taxpayer service.

Here are some important changes that may affect you:

1. An independent IRS Office of Appeals

Prior to the TFA, the appeals system was organized informally to meet due process requirements, giving taxpayers the right to have an IRS decision reviewed by an independent body. The TFA formally creates an Office of Appeals with a structure that gives greater assurance to taxpayers that IRS decisions will be reviewed independently, not just by another IRS body.

2.  Better customer service

The TFA requires a plan for better customer service and requires that this plan be sent to Congress for review and approval within one year. The plan will focus on meeting taxpayer expectations, providing better guidance to IRS employees, and other long-term improvements.

3.  Low-income taxpayer waiver

An offer in compromise (OIC) is a debt-settlement plan with the IRS.  Through an OIC, a taxpayer who is experiencing economic hardship can have their debt forgiven by the IRS. The act provides for a waiver of the $180 application fee for certain low-income taxpayers, specifically, if the taxpayer’s income is at or below 250% of the federal poverty level.

4. A plan for misdirected tax refund deposits

Before the TFA, taxpayers had a difficult time getting their tax refund if the monies were put into the wrong account. This can occur for various reasons, including incorrect account information entered on the Form 1040. The TFA requires IRS to establish procedures for handling misdirected electronic tax refund deposits. These procedures should:

• Allow taxpayers to report when an electronic refund was not transferred to their account.
• Establish coordination with financial institutions to identify and recover payments.
• Deliver refunds to the correct accounts of taxpayers.

5.  Credit and debit card payments accepted directly

Before the TFA, the IRS was prohibited from directly accepting credit and debit card payments because of associated fees and charges. Instead, the IRS used a third-party processor to accept credit and debit card payments. Now, the IRS can accept credit, debit, or charge cards for the payment of income taxes. However, the fee will be passed on to the taxpayer.

6. Protections from referrals to private debt collectors

In 2007, the IRS began referring accounts to private collection agencies for recovery. Unfortunately, this is still the case, but certain groups are now protected. The TFA provides that the following individuals cannot have their cases referred to private debt collectors:

• Those whose primary source of income is Supplemental Security Income (SSI),
• Those whose primary source of income is Social Security Disability Insurance (SSDI), or
• Individuals whose adjusted gross income is below 200% of the poverty level.

Note: Changes in section 6 will apply to qualifying accounts identified by the IRS in 2021 and later.

7. Longer installment agreements

For taxpayers whose accounts are sent to a private debt collection agency for recovery, installment payment periods have been extended. The TFA provides that collectors can now offer a seven-year agreement, instead of five.

See Taxpayer First Act (from IRS.gov) for more information. ​​​

This information last reviewed: Mar 2, 2020