Key members of Congress have introduced separate legislation to revamp the Internal Revenue Service as well and to make it easier for small businesses to offer retirement benefits.
Taxpayer First Act of 2019
House Ways & Means Oversight Subcommittee Chairman John Lewis (D-GA), Ranking Member Mike Kelly (R-PA), Chairman Neal, Ranking Member Kevin Brady (R-TX) and several members of the Oversight Subcommittee on March 28 introduced the Taxpayer First Act of 2019.
The newly reintroduced IRS reform legislation appears to be a revitalization of legislation – with some tweaks – that was approved by the House in April 2018, but was never considered by the Senate.
While the legislation does not directly single out retirement plan compliance and reporting requirement changes, or make changes to the Tax Exempt and Government Entities division, there are a few noteworthy proposals.
In general, the legislation directs the IRS to redesign the organizational structure of the agency, create an independent appeals process to review taxpayer disputes, revamp its enforcement procedures and enhance tax-filing assistance programs.
As for the IRS organizational structure, the legislation directs the agency’s administrator to “thoughtfully consider” and submit a comprehensive plan to redesign the organization, reflecting taxpayer service priorities emphasized in the legislation.
In addition, all tax-exempt organizations would be required to file their Forms 990 electronically. Currently, only tax-exempt organizations that have assets greater than $10 million and those that file more than 250 returns with the IRS are required to file Form 990 electronically.
Also included is a requirement that the agency make available an online web application to allow the electronic preparation, filing and distribution of Form 1099, similar to the online services provided by the Social Security Administration.
The legislative package also seeks to strengthen cybersecurity and taxpayer identity protection measures by the agency, as well as upgrade its information technology and electronic systems.
MEPs, PEPs and PPPs
Meanwhile, Reps. Vern Buchanan (R-FL) and Ron Kind (D-WI) – both members of the House Ways & Means Committee – on March 28 reintroduced their bipartisan legislation to make it easier and less costly for small businesses to offer retirement benefits to employees.
The Retirement Security for American Workers Act would permit businesses to join together in multiple employer plans (MEPs) with pooled plan providers (PPPs) to share the administrative burden and costs of offering a retirement plan.
In general, employers could join a covered MEP as part of a pooled employer plan (PEP) that is managed by a PPP. The ERISA requirements regarding the types of employers that may participate together in a MEP would be expanded for pooled provider plans to eliminate any requirement that the employers in the plan be related to each other in some fashion.
In citing a need for the legislation, Buchanan and Kind referenced data from Pew Charitable Trusts indicating that nearly 35% of private-sector workers over the age of 22 work for a company that does not offer a retirement plan. Buchanan and Kind previously introduced the bill in the 114th and 115th Congresses.