Submitted by United States Senator Bill Cassidy of Louisiana
WASHINGTON (Apr. 22, 2024) – United States Senators Bill Cassidy, M.D. (R-LA) and Elizabeth Warren (D-MA) introduced the Internal Revenue Service Math and Taxpayer Health (IRS MATH) Act, legislation that would improve math error notices — an Internal Revenue Service (IRS) authority used to quickly adjust taxpayers’ returns.
Each year, millions of Americans receive math error notices reducing their tax refunds but find the notices “vague and confusing” because they do not explain what error the IRS has corrected or that taxpayers have only 60 days to challenge the IRS’s position. The legislation aims to improve the unworkable system to help taxpayers, who cannot afford lawyers to help them navigate the complicated correspondence process. The legislation follows the 2024 tax filing deadline and vastly improved taxpayer services this filing season, but the lawmakers are urging the IRS to build on those improvements by fixing long-standing issues with math error notices.
“The IRS is confusing enough,” said Dr. Cassidy. “If there’s a mistake on a tax return, the IRS needs to explain it in plain English and there must be clear lines of communication. Taxpayers should have every opportunity to keep their hard-earned income.”
“Filing your taxes can get confusing — and sometimes, mistakes happen,” said Senator Warren. “And when they do, taxpayers shouldn’t be forced to decipher confusing, intimidating, and financially-impactful letters from the IRS. It’s time to improve procedures and notices that correct these errors so that hardworking Americans can get the money they’re entitled to and get back to their daily lives.”
U.S. Representatives Brad Schneider (D-IL-10) and Randy Feenstra (R-IA-04) introduced the bill in the House.
Background
The Internal Revenue Code allows the IRS to make “math error” corrections — expedited adjustments to tax returns that contain simple math or clerical errors. Unlike other adjustments, which are made after a notice period and challengeable in U.S. Tax Court, math and clerical adjustments are made automatically and require taxpayers to initiate responses to reverse them within 60 days. If the taxpayer does not contest the notice within the 60-day time period, the taxpayer forfeits their right to challenge and the IRS can move forward with its normal collections process.
The notices often list several potential errors that may have been made rather than specifying the exact issue, and they do not properly notify taxpayers of ways to contest the IRS adjustment, resulting in compounding errors on future tax returns and further risks to taxpayers.
The IRS MATH Act addresses this problem for taxpayers by:
- Directing the IRS to improve notices of math or clerical errors, requiring that notices:
- Identify the line item the IRS is changing;
- Explain the reason for the change, and;
- Clearly list the taxpayer’s required response date.
- Requiring that the IRS notify the taxpayer of abatement determinations.
- Requiring the Treasury Secretary to provide additional procedures for requesting an abatement of a math or clerical error adjustment, including by telephone or in person.
- Creating a pilot program coordinated by the IRS and National Taxpayer Advocate to determine the benefit of sending math or clerical error notices by certified or registered mail.
