Taxpayer First Act: Implications For Small Business Owners

Earlier this month, President Trump signed the Taxpayer First Act into law. Among the implications this new law has, it will help to protect small business owners from IRS seizures. Banks must report cash deposits of $10,000 or more to the IRS. This leads many businesses that deal with a lot of cash to depositing in increments just below that threshold, like $9500. However, before this law the IRS could seize that money for structuring. Structuring is making scheduled deposits in order to evade the Bank Secrecy Act which set the $10,000 threshold. This means that if you make several such deposits, legally or otherwise, the IRS had legal justification to seize that money.

According to a 2017 report by the Treasury Inspector General for Tax Administration, the IRS “enforced structuring laws primarily against legal source funds and compromised the rights of some individuals and businesses.” Now small business owners legally depositing their money will not have to worry about the threat of an IRS seizure.

The law will also make the IRS submit a “comprehensive customer service strategy.” The bill states this comprehensive strategy must, “provide assistance to taxpayers that is secure, designed to meet reasonable taxpayer expectations, and adopts appropriate best practices of customer service provided in the private sector, including online services, telephone call back services, and training of employees providing customer services.” Under the authority of the new law the IRS will be able to hire up to 40 new, temporary IT employees at once. The IRS will be able to retain these employees for up to four years. The Taxpayer First Act also allows the IRS to pay these employees a higher salary then they would have been able to pay them on their own. Another component of the bill will be upgrading cybersecurity for the IRS to help protect people from tax-related identity theft.

Overall the Taxpayer First Act is a huge win for small business owners and taxpayers. Not only does this law help protect them from IRS seizures, it also allows for independent appeals of seizures. This process allows small business owners to circumvent the costly and timely expenses of having to go through the courts in order to get their assets back from the IRS. Another important component of this law is the improvement of IRS cybersecurity and customer service. Small business owners will still have to deal with the IRS, but the Taxpayer First Act should make that process much easier.

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Meadowlands Magazine

Meadowlands Magazine

Meadowlands Magazine, the official publication of the Meadowlands Chamber and its affiliate organizations, has proudly served the business community of the Meadowlands region for over 40 years. We are among largest business magazine in New Jersey (second by circulation) and offer prime visibility opportunities for businesses to connect with potential customers.

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