Congress passes bill requiring IRS to clarify math error notices

The U.S. Senate on Monday passed the Internal Revenue Service Math and Taxpayer Help Act, H.R. 998, which, among other changes, requires the IRS to provide taxpayers with details on notices related to a math or clerical error.

Other changes in the bill include that the IRS send a notice related to an abatement of taxes assessed due to a math or clerical error; provide procedures for requesting such an abatement; and implement a pilot program for sending notices of a math or clerical error.

The bill, which the House approved earlier this year, now goes to President Donald Trump to be signed into law.

The AICPA, which endorsed the legislation when it was introduced, said the changes in the bill would enhance IRS operations and improve the taxpayer experience.

The bill “directly addresses long-standing issues with how the IRS communicates and resolves mathematical or clerical errors on tax returns,” Melanie Lauridsen, the AICPA’s vice president–Tax Policy & Advocacy, said in a news release.

The bill requires that an IRS notice about a math or clerical error include:

• A clear description of the error, including the type of error and the specific federal tax return line on which the error was made;
• An itemized computation of adjustments required to correct the error;
• The telephone number for the automated transcript service; and
• The deadline for requesting an abatement of any tax assessed due to the error.

The IRS also must send a notice related to an abatement of tax assessed due to a math or clerical error that clearly describes the abatement and includes an itemized computation of adjustments to be made to the items described in the notice of the error.

This bill also requires the IRS to:

• Provide procedures for requesting in writing, electronically, by phone, or in person an abatement of tax assessed due to a math or clerical error;
• Implement a pilot program to send notices of a math or clerical error by certified or registered mail; and
• Report certain information about the pilot program to Congress.

“By expanding access to abatement procedures and establishing a pilot program for better communication, this law provides greater fairness and due process, reduces confusion and stress, and offers taxpayers improved access to remedies,” Lauridsen said in the release.

The bill also helps tax practitioners because it allows them to “more easily offer streamlined support to their clients while reducing the administrative burden to the IRS and enhancing trust in the tax administration system,” she said.

— To comment on this article or to suggest an idea for another article, contact Martha Waggoner at Martha.Waggoner@aicpa-cima.com.