This bill clarifies how the IRS approves tax penalties before sending them to taxpayers. Right now, there's some confusion about who counts as a supervisor and when their approval is needed. The bill makes it simple: your immediate supervisor is whoever you directly report to, and they must give written approval before the IRS sends you any official notice about a penalty. This applies to various federal tax penalties that the IRS might assess against you. The goal is to add a layer of oversight so that tax penalties don't get sent out without a supervisor reviewing them first. For most taxpayers, this means there's an extra check in place before you receive a penalty notice—someone higher up has to sign off on it. This could help prevent errors or overly aggressive penalty assessments, since supervisors are responsible for reviewing whether the penalty is appropriate before it gets communicated to you.

Fair and Accountable IRS Reviews Act

Grothman, Glenn

Fair and Accountable IRS Reviews ActThis bill provides that an Internal Revenue Service (IRS) employee’s immediate supervisor&nbsp;for purposes of approving certain federal tax penalties is the person to whom such employee reports. The bill also provides that an immediate supervisor’s approval of certain federal tax penalties must be obtained (in writing) before any written communication related to such penalties is sent to the taxpayer.As background, current law requires that the initial determination by an IRS employee to assess certain federal tax penalties be approved (in writing) by such employee’s immediate supervisor (or a designated higher-level official). Under IRS regulations, an immediate supervisor is any individual with responsibility to review another individual’s proposed federal tax penalties (without such proposal being subject to an intermediary’s approval). The IRS regulations also establish requirements for when such approval must be obtained based on whether the federal tax penalty is subject to pre-assessment review or raised in Tax Court proceedings.