S.1386 - Small Business Taxpayer Bill of Rights Act of 2025 (119th Congress)
Summary
The Small Business Taxpayer Bill of Rights Act of 2025 (S.1386) aims to provide enhanced protections and rights to small businesses in their dealings with the IRS. The bill includes provisions such as modification of standards for awarding costs and certain fees, civil damages for reckless or intentional disregard of internal revenue laws, and modifications relating to offenses by officers and employees in connection with revenue laws. It also addresses issues like ex parte discussions, independent conferences, alternative dispute resolution procedures, and limitations on enforcement of liens against principal residences.
Expected Effects
The likely effect of this bill is to reduce the burden and complexity faced by small businesses when interacting with the IRS. It seeks to create a fairer and more transparent process for resolving tax disputes. By increasing penalties for IRS misconduct and providing avenues for independent dispute resolution, the bill aims to hold the IRS accountable and protect small business owners from potential abuse.
Potential Benefits
- Increased protections for small businesses against IRS overreach.
- Enhanced fairness and transparency in tax dispute resolution.
- Greater access to justice through alternative dispute resolution procedures.
- Reduced financial burden on small businesses during audits and disputes.
- Stronger accountability for IRS employees.
Potential Disadvantages
- Potential for increased litigation against the IRS, leading to higher administrative costs.
- Possible delays in tax collection due to more complex dispute resolution processes.
- Risk of unintended loopholes that could be exploited by some taxpayers.
- Increased complexity in the tax code due to the added regulations.
- Potential for frivolous claims against the IRS.
Constitutional Alignment
The bill aligns with the constitutional principles of due process and equal protection under the law, as it seeks to ensure fair treatment for small businesses in their interactions with the IRS. The Fifth Amendment's guarantee of due process is particularly relevant, as the bill aims to protect small businesses from arbitrary or unfair actions by the government. Additionally, the bill's provisions regarding privacy and protection from unreasonable searches and seizures could be seen as aligning with the Fourth Amendment.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).