Bill Overview
Title: Small Business Taxpayer Bill of Rights Act of 2022
Description: This bill modifies various tax enforcement procedures and requirements that affect small businesses and other taxpayers. The bill modifies requirements regarding awarding costs and fees to small businesses for administrative and court proceedings, the amounts of damages and penalties that are allowed for violating various tax laws, dispute resolution and appeal procedures, enforcing liens against principal residences, terminating Internal Revenue Service (IRS) employees for misconduct, reviews by the Department of the Treasury Inspector General for Tax Administration, and the release of an IRS levy due to economic hardship for business taxpayers. The bill also allows a tax deduction for a portion of a taxpayer's expenses for certain audits, prohibits ex parte communications between officers in the IRS Independent Office of Appeals and other IRS employees with respect to matters pending before the officers, establishes a 10-year term for the National Taxpayer Advocate, and repeals the requirement to submit a partial payment with an offer-in-compromise to settle a tax liability.
Sponsors: Rep. Kustoff, David [R-TN-8]
Target Audience
Population: Small Business Owners
Estimated Size: 32000000
- The legislation directly impacts small businesses, who are the primary focus of the rights and modifications discussed in the bill.
- The changes to tax procedures like dispute resolution, appeals, and fee awards primarily affect small businesses, which often lack extensive resources to handle these matters.
- The potential economic benefits from the bill, such as the allowance for tax deduction on expenses for audits, impact business owners managing their finances.
- Modifications to procedures like enforcing liens and releasing levies specifically affect small business owners facing financial challenges like economic hardship.
- A worldwide stakeholder in similar tax regulation contexts includes small business owners, who represent a significant portion of any country's economic participants.
Reasoning
- The policy primarily impacts small business owners in the United States, representing a significant portion of the economy with 32 million businesses.
- The budget constraints mean the policy needs to target efficiently to generate positive outcomes for affected stakeholders.
- Different small business owners may perceive varying levels of impact based on their current financial and operational standing.
- The potential benefits, such as ease of dispute resolution and increased financial protection from tax authorities, may enhance business stability and operator confidence over time.
- The policy is unlikely to affect individuals who are not directly associated with small business ownership or tax matters with the IRS.
- Interviews should be gathered from diverse business contexts to reflect a spectrum of perceived impacts.
- It's important to consider the long-term sustainability of any perceived positive impacts given the budget scope and policy reach.
Simulated Interviews
Coffee Shop Owner (New York, NY)
Age: 54 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 15/20
Statement of Opinion:
- I welcome any change that makes IRS processes easier for small businesses.
- Having dealt with the IRS before, anything that reduces the burden is good news.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 8 | 5 |
| Year 10 | 7 | 5 |
| Year 20 | 6 | 5 |
Freelance Web Developer (Austin, TX)
Age: 38 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 3.0 years
Commonness: 14/20
Statement of Opinion:
- The reduction in audit cost deductions might be helpful, but I don't see significant changes for me personally.
- I'm more concerned with day-to-day client interactions than IRS processes.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
Retail Manager (Chicago, IL)
Age: 45 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 10.0 years
Commonness: 10/20
Statement of Opinion:
- Changes to how IRS disputes are handled are reassuring.
- Managing a small team with constant tax pressures makes any relief welcome.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 8 | 5 |
| Year 5 | 8 | 5 |
| Year 10 | 8 | 5 |
| Year 20 | 7 | 5 |
Restaurant Owner (Atlanta, GA)
Age: 62 | Gender: male
Wellbeing Before Policy: 4
Duration of Impact: 7.0 years
Commonness: 12/20
Statement of Opinion:
- This act might reduce some burdens I've experienced with the IRS.
- Taxadays are challenging, hoping this eases some pressure.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 4 |
| Year 2 | 6 | 4 |
| Year 3 | 7 | 4 |
| Year 5 | 7 | 4 |
| Year 10 | 6 | 4 |
| Year 20 | 5 | 4 |
Start-up Entrepreneur (San Francisco, CA)
Age: 29 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 2.0 years
Commonness: 13/20
Statement of Opinion:
- This policy might offer some relief, but my primary concern is growth, not tax processes.
- I don't expect significant changes in my day-to-day operations.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 7 | 7 |
Independent Consultant (Seattle, WA)
Age: 40 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 11/20
Statement of Opinion:
- I'm hopeful that the policy can benefit my clients, even if indirectly.
- Reducing IRS burdens is always a good move for small businesses I support.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 7 | 6 |
Auto Repair Shop Owner (Phoenix, AZ)
Age: 51 | Gender: male
Wellbeing Before Policy: 3
Duration of Impact: 10.0 years
Commonness: 9/20
Statement of Opinion:
- IRS concerns take up too much of my time; any simplification would be welcome.
- I need every bit of help to keep my business afloat.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 4 | 3 |
| Year 2 | 5 | 3 |
| Year 3 | 6 | 3 |
| Year 5 | 6 | 3 |
| Year 10 | 5 | 3 |
| Year 20 | 5 | 3 |
E-commerce Business Owner (Denver, CO)
Age: 33 | Gender: female
Wellbeing Before Policy: 9
Duration of Impact: 0.0 years
Commonness: 8/20
Statement of Opinion:
- My focus is scaling and reaching new markets.
- Tax changes are less significant given the vast opportunities.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 9 | 9 |
| Year 2 | 9 | 9 |
| Year 3 | 9 | 9 |
| Year 5 | 9 | 9 |
| Year 10 | 8 | 8 |
| Year 20 | 8 | 8 |
Boutique Owner (Miami, FL)
Age: 47 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 4.0 years
Commonness: 7/20
Statement of Opinion:
- IRE encounters are daunting; any relief there is a win.
- My main worries come from international dealings.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 6 | 5 |
| Year 20 | 6 | 5 |
Contractor (Boston, MA)
Age: 55 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 5.0 years
Commonness: 10/20
Statement of Opinion:
- Reducing paperwork and IRS disputes would ease operational challenges.
- Some flexibility in IRS processes can help manage cash flow better.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 6 | 5 |
| Year 20 | 6 | 5 |
Cost Estimates
Year 1: $350000000 (Low: $300000000, High: $400000000)
Year 2: $345000000 (Low: $295000000, High: $395000000)
Year 3: $340000000 (Low: $290000000, High: $390000000)
Year 5: $335000000 (Low: $285000000, High: $385000000)
Year 10: $330000000 (Low: $280000000, High: $380000000)
Year 100: $310000000 (Low: $260000000, High: $360000000)
Key Considerations
- Possible political and public pressure to ensure IRS procedural transparency and fair conduct might affect the scope of implementation and affect enforcement timelines.
- Impacts on small businesses may differ based on size, financial health, and previous experiences with IRS audits and appeals.
- Potential adjustments needed for IRS staffing and training paradigms could affect the speed and efficiency of implementing new policies.