April 18, 2024

Warren, Cassidy Introduce Bipartisan Legislation to Simplify IRS Notices, Empower Hardworking Taxpayers

Bill would improve IRS math error notices — a form of vague and confusing communication notifying taxpayers of reduced tax refunds, resulting in significant consequences if taxpayers do not act quickly. 

 Bill Text (PDF) | Bill One-Pager (PDF)

Washington, D.C. – Today, U.S. Senators Elizabeth Warren (D-Mass.) and Bill Cassidy (R-La.) introduced the Internal Revenue Service Math and Taxpayer Help (IRS MATH) Act, legislation that would improve math error notices — an Internal Revenue Service (IRS) authority used to quickly adjust taxpayers’ returns. Representatives Brad Schneider (D-Ill.) and Randy Feenstra (R-Iowa) introduced the bill in the House.

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 lawmakers hope to improve the unworkable system to help taxpayers, especially low-income and non-English speaking Americans, 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. 

“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.” 

“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.”

“Customer service must be a leading principle for the IRS and its work – but right now, what the IRS shares with taxpayers who have simple errors in their tax returns is far from straightforward and helpful,” said Representative Schneider. “When the agency reaches out to taxpayers about tax return errors or amendments to make, it’s crucial the IRS communicate with clear information. I am proud to introduce this legislation – which follows recommendations made by the National Taxpayer Advocate – to bolster the IRS’ communication and customer service when it comes to inadvertent taxpayer errors.”

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:

  1. Directing the IRS to improve notices of math or clerical errors, requiring that notices:  
    1. Identify the line item the IRS is changing; 
    2. Explain the reason for the change, and; 
    3. Clearly list the taxpayer’s required response date.
  2. Requiring that the IRS notify the taxpayer of abatement determinations.
  3. 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.
  4. 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.

Senator Warren has, throughout her career, advocated for low-income taxpayers and for improved IRS procedures: 

  • In April 2024, Senator Warren and colleagues applauded the success of Direct File’s Pilot during the 2024 tax filing season, highlighting rave reviews, millions of dollars in refunds claimed and filing fees saved.
  • In April 2024, Senator Warren sent a letter to Chair Lina M. Khan of the Federal Trade Commission (FTC), blasting Intuit, the maker of TurboTax, for continuing to relentlessly upsell TurboTax users despite numerous FTC and state lawsuits and settlements. Senator Warren applauded the FTC’s oversight of Intuit, and urged the Commission to continue to take action to protect taxpayers from tax preparation companies that pile junk fees onto users.
  • In March 2024, Senator Warren celebrated the successful launch of the IRS’s Direct File pilot.
  • In March 2024, Senator Warren highlighted the positive feedback that the IRS’s Direct File pilot in 12 states has received from taxpayers and asked Secretary of the Treasury Janet Yellen to commit to expanding and extending the program in 2025 if positive feedback continues, which Yellen agreed to. 
  • In February 2024, Senators Warren, Blumenthal, Sanders, and Representative Porter sent a response to Intuit, blasting the company for its failure to answer basic questions the lawmakers asked in their January 2, 2024 letter seeking an accounting of the expenses underlying the company’s massive federal research tax breaks.
  • In January 2024, Senators Warren, Blumenthal (D-Conn.), and Bernie Sanders (I-Vt.), and Representative Katie Porter (D-Calif.) sent a letter to Intuit requesting a full accounting of the expenses underlying the company’s massive federal research tax breaks by January 16, 2024. Intuit disclosed that it received $94 million in federal research tax credits in 2022, while simultaneously spending millions lobbying against the establishment of a free program for Americans to file their taxes online. 
  • In October 2023, Senators Warren, Ron Wyden (D-Ore.), Chair of the Senate Finance Committee, Blumenthal, Tammy Duckworth (D-Ill.), Sanders, Sheldon Whitehouse (D-R.I.), and Representative Porter sent letters to five tax preparation companies—H&R Block, TaxAct, TaxSlayer, Ramsey Solutions, and Intuit—that recently received notices of penalty offenses from the Federal Trade Commission (FTC) regarding the misuse of taxpayer’s sensitive and confidential information. 
  • In October 2023, Senators Warren and Patty Murray (D-Wash.), Chair of the Senate Appropriations Committee, and Representatives Porter, Brad Sherman (D-Calif.), and Don Beyer (D-Va.) released a statement supporting the U.S. Department of Treasury and the Internal Revenue Service (IRS) joint announcement of their 2024 pilot of Direct File, a program that allows Americans to file tax returns digitally and free of charge. The lawmakers acknowledged the Inflation Reduction Act’s role in the program’s development, and stated their intention to support the IRS’s efforts to develop and expand the Direct File pilot. 
  • In August 2023, Senator Warren and Representative Porter sent a letter to the Free File Alliance, the American Coalition for Taxpayer Rights, Intuit, and H&R Block admonishing the companies’ relentless lobbying against the Internal Revenue Service’s (IRS) direct free filing tool. 
  • In July 2023, Senators Warren, Wyden, Blumenthal, Duckworth, Sanders, and Whitehouse and Representative Porter released a report revealing the outrageous, extensive, and potentially illegal sharing of taxpayers’ sensitive personal and financial information with Meta by online tax preparation companies. The lawmakers also sent a letter to the IRS, the Treasury Inspector General for Tax Administration, the Federal Trade Commission, and the Department of Justice highlighting their key findings and calling on these departments to fully investigate this matter and prosecute any company or individuals who violated the law.
  • In June 2023, Senators Warren and Tom Carper (D-Del.) and Representatives Sherman, Porter, and Beyer, led a coalition of 99 Democratic lawmakers in a letter to IRS Commissioner Daniel Werfel and Deputy Treasury Secretary Adewale Adeyemo, applauding the IRS’s announcement of a pilot of a free tax filing tool next year.
  • In May 2023, Senator Warren’s call for a Free E-File Program was finally answered by the IRS through the Inflation Reduction Act .
  • In April 2023, Senators Warren and Carper led 29 other senators in a letter to the IRS Commissioner, urging the agency to simplify the tax process and broaden access to free e-filing options.
  • In April 2023, at a hearing of the Senate Finance Committee, Senator Warren questioned the IRS Commissioner about the agency’s failed Free-File partnership with private tax preparation software companies and called on the agency to implement a direct E-File program. 
  • In December 2022, Senators Warren and Wyden and Representatives Porter and Sherman sent letters to tax preparation companies H&R Block, TaxAct, and TaxSlayer, plus big tech firms Meta and Google, amid reports that the tax preparation companies have been secretly transmitting individual taxpayers’ sensitive financial information to Meta and Google
  • In August 2022, Senator Warren highlighted key priorities she secured in the Senate’s Inflation Reduction Act, including establishing an IRS task force to look into developing and running an IRS-run free direct E-File tax return system, based on Senator Warren’s Tax Filing Simplification Act. 
  • In July 2022, Senator Warren led 22 lawmakers to introduce the Tax Filing Simplification Act of 2022, legislation that would direct the IRS to develop its own free online tax preparation and filing service that would simplify the tax filing process for millions of Americans. 
  • In June 2022, at a hearing of the Senate Finance Committee, Secretary of Treasury Janet Yellen agreed with Senator Warren on the need to create a free tax filing system that actually works for Americans. 
  • In June 2022, Senator Warren and Representatives Porter and Sherman sent a letter to Richard K. Delmar, Acting Treasury Department Inspector, General, J. Russell George, Treasury Inspector General for Tax Administration, and Andrew Katsaros, Acting Inspector General at the Federal Trade Commission, regarding troubling reports of Intuit's abuse of the revolving door and the company's hiring of former federal regulators and influence-peddlers to defend its shady business practices. In the letter, which is a follow up to the prior April 2022 letter, the lawmakers call out Intuit for forcing American taxpayers into paying for services that should be free, and request an in-depth investigation into the company and its use of the revolving door to influence policy decisions at those agencies. 
  • In April 2022, Senator Warren and Representatives Sherman and Porter sent a letter to Intuit regarding the company’s unethical use of the revolving door to hire former regulators to defend their shady business practices that scam taxpayers out of billions of dollars. In June 2022, the lawmakers sent a follow-up.
  • In February 2022, Senator Warren and Representative Pramila Jayapal (D-Wash.) sent a letter to the Acting Inspector General of the Department of Treasury and the Treasury Inspector General for Tax Administration, calling on them to open an investigation into the unethical revolving door between the world’s largest accounting firms and the Treasury Department and IRS. 
  • In February 2022, Senator Warren made the case for increased funding for the Internal Revenue Service (IRS) through the Build Back Better Act and called on the administration to create the simplified filing tools proposed in her Tax Filing Simplification Act