Removing Barriers Blog

Ways and Means Committee Passes H.R. 1957, the Taxpayers First Act of 2019
Posted April 02, 2019 by CUNA Advocacy

Today, the House Ways and Means Committee passed bipartisan legislation that will have a significant impact on credit unions should it pass the Senate and be enacted into law.  Among the bills passed was H.R. 1957, the “Taxpayer First Act of 2019.” 

The Taxpayers First Act would: 

  • Make changes to the Bank Secrecy Act.  There are two provisions related to suspected or actual “structuring transactions” and their treatment under the Bank Secrecy Act.  The first provision would only allow the IRS to pursue the seizure or forfeiture of assets if either the property to be seized was derived from an illegal source or the transactions were structured for the purpose of concealing a violation of a criminal law or regulation other than rules against structuring.  It also includes post-seizure procedures.  The second provision provides a taxpayer exemption for interest liability should a court return funds to a taxpayer whose assets were mistakenly seized based on invalidated structuring claims. 
  • Require the Treasury Department, the IRS, and the Bureau of Fiscal Service to consult with financial institutions and submit a report to Congress describing how the IRS can utilize new payment methods and platforms to increase the number of tax refunds that can be paid by electronic funds transfer.  The report is required to consider the impact on taxpayers who do not have access to traditional credit union or bank accounts. 
  • Require the IRS to create a website to allow taxpayers to electronically file IRS Form 1099s. 
  • Require the IRS to automate the “Income Verification Express Service (IVES)” system.  The current “Income Verification Express Service” (IVES) program requires that taxpayer transcript information requests be submitted to the IRS by fax and then the transcripts are furnished electronically.  This provision would require the IRS to implement a disclosure program that is fully automated.  This system is often used by mortgage lenders to verify the income of a taxpayer who is a borrower in the process of a loan application.  Users of this new system would be charged fees to cover the cost of the program.  Hopefully, the improvement and speed in the loan approval process will justify these new fees.  This improved program will certainly be a welcome tool for credit union loan officers.
  • Allow the payment of federal taxes by debit and credit cards.  Under current law, taxpayers can generally pay their taxes with payment cards through third party processors and only if the IRS does not incur any fees.  This provision would allow the direct payment of taxes by taxpayers using payment cards but does require that these taxpayers are as responsible as possible for any such fees assessed through these payments and card processing contracts. 
  • Require electronic filing of the annual returns of certain tax-exempt organizations and make these returns available to the public.  This would be accomplished by extending the requirement to “e-file” to all tax-exempt organizations required to file statements or returns in the IRS Form 990 series.  It would also require that the IRS make the information provided on the forms available to the public in a machine-readable format as soon as possible. 
  • Require the IRS to provide notice to an organization that fails to file a Form 990 for two consecutive years.  Ordinarily, an organization’s tax-exempt status is automatically revoked if it fails to file a Form 990 for three consecutive years. 

CUNA is generally supportive of this legislation and will continue to advocate for credit union interests as this legislation now moves to the Senate.