# Plain Language Summary: Small Business Taxpayer Bill of Rights Act of 2025

This bill gives small business owners stronger protections when dealing with the IRS and makes it easier for them to fight back if the IRS treats them unfairly. The law creates several new rights and increases penalties when IRS employees misbehave or overstep their authority.

**Making it easier to recover costs from the IRS.** If a small business wins a dispute with the IRS, the company can now recover its legal fees and costs without worrying about net worth limits. Previously, only businesses below a certain net worth threshold could recover these expenses. Now, any business making less than $50 million in average annual revenue can recover what it spent fighting the IRS, no matter how wealthy the owner is. This threshold will increase with inflation each year, making it more accessible over time.

**Bigger penalties for IRS misconduct.** The bill significantly increases the damages small businesses can collect if IRS employees act recklessly or intentionally break the rules. If an IRS agent wrongfully seizes your property or violates your rights, you can now sue for up to $5 million instead of $1 million. For negligence, the limit jumps from $100,000 to $500,000. You also get five years instead of two years to file a lawsuit. Similarly, if an IRS employee illegally looks at your tax information or shares it without permission, the minimum penalty increases from $1,000 to $10,000 per violation. IRS employees who commit crimes related to tax laws face higher criminal penalties too—fines increase from $10,000 to $25,000 for serious violations.

**Protecting your independence during appeals.** When you appeal an IRS decision, you now have the right to meet with the IRS Appeals Office without IRS enforcement agents or lawyers present, unless you specifically ask them to be there. This prevents the IRS from using intimidation tactics or having multiple officials gang up on you during negotiations. The bill also bans secret conversations between appeals officers and other IRS employees about your case, ensuring the process stays fair and transparent.

**Better dispute resolution options.** The IRS must now offer mediation and arbitration to resolve disputes with small businesses, unless the IRS specifically explains why your particular issue isn't suitable for these processes. You can also choose to have an independent mediator (not an IRS employee) help resolve your case, giving you a neutral third party to ensure fairness.

**Additional protections for struggling businesses.** The bill makes it easier for business owners facing financial hardship to get the IRS to release liens on their property. It also eliminates the requirement that you make a partial payment when you submit an offer-in-compromise—an agreement to settle your tax debt for less than you owe. This removes a financial barrier that prevented struggling businesses from even attempting to negotiate with the IRS.

Overall, this bill shifts the balance of power by making it more costly and risky for the IRS to act improperly against small businesses, while also giving business owners more practical tools to resolve disputes fairly.