Trump signs bipartisan IRS reform bill

President TrumpDonald John TrumpAppeals court OKs White House diverting military funding to border wall construction Pentagon: Tentative meeting between spy agencies, Biden transition set for early next week Conservative policy director calls Section 230 repeal an 'existential threat' for tech MORE on Monday signed into law a bipartisan bill to make improvements to the IRS that does not include a controversial provision that would have codified the Free File program for low- and middle-income taxpayers.

Trump told reporters in the Oval Office that he signed the bill, known as the Taxpayer First Act, calling it a "tremendous thing for our citizens."

The bill’s signing comes after the House and the Senate passed the bill by voice vote.

“This signing is the culmination of a lengthy, bipartisan process undertaken by the Ways and Means Committee to implement pro-taxpayer reforms at the IRS for the first time in more than 20 years,” House Ways and Means Committee Chairman Richard NealRichard Edmund NealHoyer releases 2021 House calendar A need for reauthorization of the Elder Justice Act Biden names Janet Yellen as his Treasury nominee MORE (D-Mass.) said in a statement. “New protections for low-income taxpayers, practical enforcement reforms and upgraded assistance for taxpayers and small businesses will all now go into place.” 

The top Republican on the committee, Rep. Kevin BradyKevin Patrick BradyRaising the required minimum distribution age for America's seniors On The Money: Biden, Democratic leaders push for lame-duck coronavirus deal | Business groups shudder at Sanders as Labor secretary | Congress could pass retirement bill as soon as this year Top Democrat: Congress could pass retirement bill as soon as this year MORE (Texas), also praised the measure’s enactment.

“Thank you to President Trump for signing this historic legislation, which is the biggest and boldest step in over 20 years to redesign and restructure the IRS into an agency with a singular mission — quality taxpayer service,” he said.

Brady and Rep. Mike KellyGeorge (Mike) Joseph KellyPennsylvania Supreme Court refuses to halt GOP defeat in election lawsuit Cruz urges Supreme Court to take up Pennsylvania election challenge Lieutenant governor: Trump campaign would get its 'clock cleaned' if it appeals Pennsylvania ruling to Supreme Court MORE (Pa.), the top Republican on the Ways and Means Committee's Subcommittee on Oversight, were in the Oval Office when Trump spoke.

The law makes a host of targeted improvements to the IRS, aimed at bolstering its customer service, modernizing its information technology, helping victims of tax-related identity theft and strengthening taxpayers’ rights during the IRS enforcement process.

Among the provisions in the new law are establishing an independent appeals office, preventing low-income taxpayers from having their cases referred to the IRS’s private-debt collection program and creating a single point of contact at the IRS for identity theft victims. It also includes a provision to increase the penalty for failing to file a tax return, so that the bill does not add to the deficit.

The law came about after lawmakers held numerous hearings and roundtables about overhauling the IRS. Prior to its June vote on the final version, the House had passed iterations of the bill multiple times last year, as well as one in April.

But the legislation suffered a setback earlier this year over a provision in the previous versions of the bill that would have codified the IRS’s Free File program, in which the IRS partners with tax-prep companies to have those companies offer free tax-filing software to many taxpayers.

Some Democratic lawmakers — who want the IRS to create its own free, online filing system and are worried about corporate influence in politics — raised concerns about the Free File provision on the day the House passed the April version of the bill, after ProPublica wrote an article highlighting tax-prep companies’ lobbying on the issue.

In the weeks following the April vote, ProPublica wrote additional articles about the Free File program, reporting that tax-prep companies have taken steps to hide their options under the program. Those articles prompted the IRS to launch a review of the program, and lawmakers on both sides of the aisle have urged the agency to take any necessary steps to address issues with the program.

Lawmakers introduced a new version of the Taxpayer First Act that did not include the Free File provision in early June, which the House and Senate both quickly passed, and which has now been signed into law.

—Updated at 7:19 p.m.