Section 1 Short title
This Act may be cited as the “IRS Improper Payments Act”.
IRS Improper Payments Act
A BILL
To reduce improper payments and eliminate waste in Federal programs, and for other purposes.
Sec. 2 Findings and purpose
Findings— Congress finds that when the Internal Revenue Service makes payments to taxpayers, the Internal Revenue Services must make every effort to confirm that the right recipient is receiving the right payment for the right reason at the right time.
Purpose— The purpose of this Act is to—
reduce improper tax payments by the Internal Revenue Service—
by intensifying efforts to eliminate payment error, waste, fraud, and abuse; and
by continuing to ensure that the Internal Revenue Service provides accessible taxpayer services;
adopt a comprehensive set of policies, including—
transparency of significant improper tax payments; and
accountability for reducing improper tax payments; and
protect taxpayer services.
Sec. 3 Improper tax payment defined
For purposes of this Act, the term improper tax payment means any credit or refund of an overpayment of a tax imposed under the Internal Revenue Code of 1986 that should not have been made or that was made in an incorrect amount.
Sec. 4 Transparency
In general— Not later than 90 days after the date of enactment of this section, the Secretary of the Treasury shall establish, in coordination with the Commissioner of Internal Revenue, annual targets for reducing improper tax payments made by the Internal Revenue Service.
Published information—
In general— Not later than 180 days after the date of enactment of this section, and annually thereafter, the Secretary of the Treasury shall publish on the internet information about improper tax payments made by the Internal Revenue Service.
Contents— The information published under paragraph (1) shall include, subject to Federal privacy policies and to the extent permitted by law—
the name of the accountable official designated under section 5(a);
rates and amounts as of the date of enactment of this section, and historical rates and amounts, of improper tax payments made by the Internal Revenue Service, including, if known and appropriate, the causes of the improper tax payments;
rates and amounts as of the date of enactment of this section, and historical rates and amounts, of the recovery of improper tax payments (estimated on the basis of applicable samples where appropriate); and
the annual targets for reducing improper tax payments.
Methodology— The methodology used for identifying and measuring improper tax payments under this section shall meet the requirement of section 3352(c)(1)(A) of title 31, United States Code.
Links— The Commissioner of Internal Revenue shall prominently display on the homepage of the website of the Internal Revenue Service a link to internet-based resources for addressing improper tax payments, including the information published under subsection (b)(1).
Sec. 5 Accountability and coordination
Accountable officials— Not later than 120 days after the date of enactment of this section, the Commissioner of Internal Revenue shall designate an official to be accountable for meeting the reduction targets under section 4(a) without unduly burdening taxpayer services.
Report—
In general— Not later than 180 days after the date of enactment of this section, and annually thereafter, the official who is designated under subsection (a) shall provide the Director of the Office of Management and Budget and the appropriate congressional committees a report that includes—
the methodology used for identifying and measuring improper tax payments under section 4(c);
the plans for meeting the reduction targets under section 4(a); and
the plans and supporting analysis for ensuring that initiatives undertaken in accordance with this title do not unduly burden taxpayer services.
Appropriate congressional committees— For purposes of paragraph (1), the term appropriate congressional committees means the Committee on Finance of the Senate and the Committee on Ways and Means of the House of Representatives.
Duties of inspector general— Not later than 60 days after the date on which the annual report required under subsection (b) is submitted, the Treasury Inspector General for Tax Administration shall—
assess the level of risk for improper tax payments by the Internal Revenue Service;
determine the extent of oversight warranted (in addition to oversight requirements under section 3353 of title 31, United States Code); and
provide the Commissioner of Internal Revenue with recommendations, if any, for modifying the methodology, improper tax payment reduction plans, or taxpayer services.
Agency failure—
In general— If the Internal Revenue Service does not demonstrate an improvement in reducing improper tax payments, fails to develop a plan to meet reduction targets under subsection (b)(1)(B), or fails to implement the plans described in subsection (b)(1)(C) for not less than 2 consecutive years, the official designated under subsection (a) shall submit to the Commissioner of Internal Revenue, the Treasury Inspector General for Tax Administration, and the Chief Financial Officer of the Internal Revenue Service a report that—
describe the likely causes of the lack or improvement or failure; and
proposes a remedial plan.
Review— Annually, the Commissioner of Internal Revenue shall, with respect to a remedial plan proposed under paragraph (1)(B)—
review the remedial plan; and
in consultation with the Treasury Inspector General for Tax Administration and Chief Financial Officer of the Internal Revenue Service, forward the remedial plan and any additional comments and analysis to the Director of the Office of Management and Budget.
Sec. 6 Policy proposals
In general— Not later than 180 days after the date of enactment of this section, the Secretary of the Treasury, in consultation with the Commissioner of Internal Revenue and the Treasury Inspector General for Tax Administration, shall develop policy recommendations, including potential legislative proposals, designed to reduce improper tax payments, including improper tax payments caused by error, waste, fraud, and abuse, made by the Internal Revenue Service.
Inclusion— The recommendations developed under subsection (a) shall be included, as appropriate, in the budget of the President under section 1105(a) of title 31, United States Code, for fiscal year 2024 and each fiscal year thereafter.