Could New IRS Reforms Mean Better Results for Taxpayers?

For many taxpayers, the most frustrating part of an IRS problem is not necessarily the tax law itself. It is receiving a notice that does not clearly explain the issue. It is waiting months for an answer. It is submitting the same documents more than once. It is trying to reach the right department before an important deadline expires.

A bipartisan proposal moving through Congress could begin to address some of those problems. On July 30, 2026, the Senate Finance Committee voted 26-1 to advance the Taxpayer Assistance and Service Act — commonly called the TAS Act. The legislation contains more than 60 proposed reforms intended to modernize IRS operations, strengthen taxpayer rights, and create a more responsive tax administration system.

This Is About How the IRS Treats and Serves Taxpayers

Most tax legislation focuses on rates, deductions, credits, or filing requirements. The TAS Act is different. Its primary focus is how the IRS processes returns, communicates with taxpayers, collects outstanding balances, and handles disputes.

That distinction matters. A taxpayer can have a strong position and still struggle to obtain a good result if correspondence is delayed, documents cannot be located, appeal rights are unclear, or the case becomes trapped in an administrative process. The proposed reforms would not guarantee that the IRS agrees with every taxpayer — but they could provide a better structure for taxpayers to present their cases and receive meaningful decisions.

Better Information and Communication

The legislation would require the IRS to improve the information available to taxpayers regarding delayed returns, correspondence, and refunds. Proposed improvements include a public dashboard showing IRS backlogs and wait times, more individualized information through the "Where's My Refund?" and "Where's My Amended Return?" systems, and expanded online accounts.

Taxpayers and authorized representatives could eventually view images of returns, notices, letters, and other documents covering a rolling six-year period and respond to certain IRS inquiries through the online account. The legislation also establishes a congressional goal of making callback technology available on major IRS telephone lines by 2028. These changes may sound administrative, but knowing that a document was received, understanding why a return was suspended, and being able to respond electronically could prevent many cases from becoming larger and more expensive than necessary.

More Practical Options for Taxpayers Who Cannot Pay in Full

The TAS Act also addresses taxpayers who owe the IRS but do not have the financial ability to immediately pay the entire balance. Under the proposal, the IRS would be required to inform certain taxpayers who appear to be experiencing economic hardship about collection alternatives, which may include:

• A partial-payment installment agreement
• An offer in compromise
• Placement in currently-not-collectible status

An offer in compromise is a formal IRS program that may allow a qualifying taxpayer to resolve a tax liability for less than the full balance. The proposed legislation would streamline part of the offer-review process and give taxpayers additional review rights when the IRS returns an offer as "non-processable."

For taxpayers trying in good faith to resolve an old tax balance, these changes could reduce procedural roadblocks and provide a better opportunity to have the actual facts and financial circumstances considered.

A Stronger and More Meaningful Appeals Process

The IRS Independent Office of Appeals is intended to resolve tax disputes fairly and without litigation. The TAS Act would strengthen the independence of Appeals by allowing it to hire its own attorneys and other qualified personnel. It would also clarify that Appeals must consider the hazards of litigation — in other words, the likely result if the IRS and taxpayer took the dispute to court.

For taxpayers with a well-documented and reasonable position, that could improve the opportunity to resolve a case without the time and expense of court.

Better Protections Involving Penalties, Refunds, and Third Parties

For certain penalties, written supervisory approval would generally be required before the IRS sends the taxpayer a notice that can be appealed or litigated. The bill would also require the IRS to act on properly submitted refund claims within 12 months — or by a later date agreed to by the taxpayer — and provide a detailed explanation and instructions for appealing a disallowance.

When the IRS intends to contact a customer, vendor, financial institution, or another third party for information about a taxpayer, the proposal would generally require the IRS to identify the specific information it plans to request and give the taxpayer an opportunity to provide it first. The bill would also extend a version of the traditional mailbox rule to qualifying electronic submissions and payments.

Broader Access to Independent Court Review

The proposal would expand the types of disputes the United States Tax Court can hear. Among other changes, the Tax Court could be authorized to order refunds in certain collection due process cases and hear refund cases involving claims of up to $2 million. The bill would also allow some taxpayers who are making payments under an installment agreement, or who are in currently-not-collectible status, to pursue a refund claim without first paying the entire disputed tax balance. The practical result could be important: more taxpayers may have access to an independent forum without first being required to pay a disputed liability in full.

What Taxpayers Should Do Now

The possibility of a more taxpayer-friendly system is encouraging, but good results will still begin with preparation. When dealing with the IRS, taxpayers should:

• Identify every response and appeal deadline immediately
• Retain copies of all notices and correspondence
• Preserve proof of mailing or electronic submission
• Maintain organized financial records supporting the position being taken

It is also generally better to involve a qualified representative before deadlines are missed or the IRS's position becomes administratively final. A representative can review the account history, determine what the IRS is requesting, identify available appeal or collection options, and prepare a consistent, documented response.