# Plain Language Summary: Small Business Taxpayer Bill of Rights Act of 2023

This bill gives small business owners stronger protections when dealing with the IRS. It makes several important changes to help level the playing field between small businesses and the tax agency, particularly when disputes arise.

The bill makes it easier for small businesses to recover their legal costs if they win a dispute with the IRS. Currently, businesses have to prove they're not too wealthy to qualify for this help. Under this new law, any business with average annual revenue under $50 million can recover costs without worrying about how much money they have. This matters because fighting the IRS in court is expensive, and many small business owners can't afford to pursue legitimate disputes without this protection.

The bill also increases the financial penalties when IRS employees misbehave. If an IRS agent acts recklessly or intentionally breaks tax laws, a business owner can now sue for up to $5 million instead of $1 million. If the agent is merely negligent, the limit goes up to $500,000 instead of $100,000. Additionally, businesses now have five years instead of two years to file these lawsuits. The bill also increases penalties for IRS employees who illegally snoop into tax records or share private information, raising the minimum penalty from $1,000 to $10,000 per violation.

The bill creates important fairness rules for how the IRS handles disputes with small businesses. It bans secret conversations between IRS appeals officers and other IRS employees about your case—basically preventing the appeals process from being rigged. It also guarantees that you can have a meeting with the IRS appeals office without IRS lawyers or enforcement staff present unless you agree to it. The bill expands options for resolving disputes through mediation or arbitration, giving businesses alternatives to formal litigation. Finally, it prevents the IRS from seizing your home to collect business taxes if it would cause serious financial hardship, and it makes it easier for struggling businesses to settle their tax debts through compromise agreements.

Small Business Taxpayer Bill of Rights Act of 2023

Kustoff, David

Small Business Taxpayer Bill of Rights Act of 2023 This bill modifies various tax enforcement procedures and requirements that affect small businesses and other taxpayers. The bill modifies requirements regarding <ul> <li> awarding costs and fees to small businesses for administrative and court proceedings, </li> <li> the amounts of damages and penalties that are allowed for violating various tax laws, </li> <li> dispute resolution and appeal procedures, </li> <li> enforcing liens against principal residences, </li> <li> terminating Internal Revenue Service (IRS) employees for misconduct, </li> <li> reviews by the Department of the Treasury Inspector General for Tax Administration, and </li> <li> the release of an IRS levy due to economic hardship for business taxpayers. </li> </ul> The bill also <ul> <li> allows a tax deduction for a portion of a taxpayer's expenses for certain audits,</li> <li> prohibits ex parte communications between officers in the IRS Independent Office of Appeals and other IRS employees with respect to matters pending before the officers,</li> <li> establishes a 10-year term for the National Taxpayer Advocate, and </li> <li> repeals the requirement to submit a partial payment with an offer-in-compromise to settle a tax liability.</li> </ul>