Congress Has a Chance to Improve the Taxpayer Experience in 2026

“Simple” and “transparent” are not terms typically associated with filing taxes. On the contrary, the annual taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. filing process fills most with anxiety and confusion, costing Americans $536 billion annually. To make this experience a little less stressful, the Senate recently passed the Taxpayer Assistance and Service (TAS) Act, which would ease some burdens for taxpayers and provide valuable data on where complexity arises in the tax code.

The last major congressional effort to address tax administration was the InflationInflation is when the general price of goods and services increases across the economy, reducing the purchasing power of a currency and the value of certain assets. The same paycheck covers less goods, services, and bills. It is sometimes referred to as a “hidden tax,” as it leaves taxpayers less well-off due to higher costs and “bracket creep,” while increasing the government’s spendin Reduction Act, which provided $80 billion to the IRS mostly for enforcement and operations support. However, Congress provided little direction to the IRS on how to use the funding, nor did the law directly streamline IRS functions or processes.

After the experience of the COVID-era IRS issues, Congress, the Taxpayer Advocate Service, and taxpayer organizations proposed reforms to improve tax administration, many of which are in the TAS Act.

The Senate-passed TAS Act contains 65 reforms across 10 titles related to IRS modernization, taxpayers’ rights, tax return preparers, and other tax administration topics. While some provisions address specific taxpayer issues, many will improve the experience for the more than 150 million Americans who file taxes every year, while establishing and strengthening important taxpayer protections.

Since 1998, Congress has required the IRS to produce a report on the source of tax complexity, but the IRS has only rarely released it. While data exists on how costly tax compliance is for taxpayers, no data or report exists on which forms or provisions are causing complexity. The TAS Act clarifies congressional intent for the IRS to produce this report and another on the status of the Act’s implementation.

IRS Modernization

Paper is the enemy of the IRS. The TAS Act requires the IRS to accept digital returns and amended returns and then process them electronically. Paper returns take more time and resources for the IRS to process than electronic ones, delaying refunds and diverting staff. The TAS Act requires the IRS to accept digital returns and amended returns and then process them electronically. The bill also requires the IRS to create an online dashboard of call wait times and pushes the agency to expand the availability of callback technology. Further, the “Where’s My Refund?” and “Where’s My Amended Return?” tools are expanded and enhanced.

Most, if not all, financial institutions allow customers to create an online account to access their data. The IRS offers online accounts for taxpayers, but they have limited functionality, hindering their effectiveness. The bill improves online accounts at the IRS by expanding the types of tax documents that are viewable and enhancing tax practitioners’ ability to access their clients’ accounts (with client permission).

Taxpayer Protections

Taxpayers and tax preparers often face a fundamental imbalance when addressing an issue with the IRS. The agency has a multibillion-dollar budget, sweeping legal powers, and thousands of employees. Taxpayers, on the other hand, juggle busy schedules and face a complex tax code that wasn’t written for them. Tax preparers may have more knowledge of the tax code than their clients, but they also must balance tight deadlines, multiple clients, and a well-resourced IRS.

The TAS Act would strengthen many taxpayer protections Congress has already written into law and enshrine new ones. Among the pro-taxpayer provisions are:

• Requiring the IRS to send quarterly notices to taxpayers with delinquencies, rather than annual notices. More frequent communication between taxpayers and the IRS may reduce the number of disputes that are escalated, and this requirement puts the communication burden on the IRS, where it belongs.
• Strengthening the requirement for supervisory approval before the IRS can assess certain penalties or disallow taxpayers a tax creditA tax credit is a provision that reduces a taxpayer’s final tax bill, dollar-for-dollar. A tax credit differs from deductions and exemptions, which reduce taxable income rather than the taxpayer’s tax bill directly. in the future, providing a check and balance before these significant sanctions are levied against a taxpayer.
• Requiring the IRS to return excess amounts it collected from taxpayers after a so-called “offer in compromise.” Under current law, the IRS can collect more than is required from the taxpayer but is not required to pay those extra amounts back.

Even the part of the TAS Act that has generated the most discussion in recent weeks—its new requirements for tax preparers—may enhance taxpayer protections, cut down on preparer fraud, and make it easier for taxpayers to identify good preparers from bad.

Big Picture

The TAS Act contains dozens of bipartisan reforms that could simplify tax filing, enhance transparency for taxpayers in dealing with the IRS, and provide more stability in the year-to-year filing process that fills many Americans with dread. The bill won’t solve every problem at the agency, and it’s no substitute for congressional efforts to reform and simplify the code, but it’s a step in the right direction for a better IRS.