Small Business Taxpayer Bill of Rights Act of 2025

Sponsor: David Kustoff (Republican-TN)April 9, 2025

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Introduced

In Committee

Passed One Chamber

Passed Both Chambers

Signed into Law

Referred to the Committee on Ways and Means, and in addition to the Committee on Oversight and Government Reform, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.

Strengthens taxpayer rights and protections for small businesses during IRS disputes.

This bill would give small businesses and individual taxpayers more rights when dealing with the IRS. It would make it easier for them to dispute tax issues, increase penalties for IRS misconduct, and limit the IRS's power in certain situations. These changes aim to provide more fairness and protection for taxpayers.

What Would Change

Today, small businesses and taxpayers face certain limits on recovering legal costs and have specific rules for IRS appeals and collections. After this bill, small businesses would have an easier time recovering legal costs without net worth limits, and all taxpayers would see increased damages for IRS misconduct, a ban on new issues in appeals, and stricter rules for home seizures. The process for settling tax debts through offers-in-compromise would also change, removing the partial payment requirement for all taxpayers.

Key Provisions

Small businesses would not have net worth limits to recover legal costs in tax disputes.
Taxpayers could sue for up to $5 million in damages if the IRS recklessly disregards tax laws, up from $1 million.
IRS employees would face higher penalties for certain offenses and could be fired for unauthorized discussions during appeals.
Taxpayers would have the right to an independent conference during IRS appeals, without other IRS personnel present unless they agree.
The IRS would be banned from raising new issues during an internal appeal, limiting the scope of disputes.
The IRS would face stricter limits on seizing a taxpayer's main home for unpaid taxes, requiring a high-level review.

View on Congress.gov

HR 2782 · 119th Congress · April 9, 2025 · AI Summary by gemini-2.5-flash · 8/10

Small Business Taxpayer Bill of Rights Act of 2025

What Would Change

Key Provisions

Lobbying Activity