President Trump has signed the Internal Revenue Service Math and Taxpayer Help Act into law, requiring the IRS to provide a clear explanation of tax-filing errors to taxpayers on its math error notices, identify the item that’s being changed, and explain why a tax refund is higher or lower than expected.
The bipartisan bill, backed by the American Institute of CPAs, was introduced in February by Rep. Randy Feenstra, R-Iowa, and Brad Schneider, D-Illinois, members of the House Ways and Means Committee, where it quickly passed later that month. The House passed the IRS Math Act in April and then the Senate passed it in October in the midst of the government shutdown.
The bill requires the IRS to notify taxpayers of the specific reasoning for math errors and provides 60 days to challenge the IRS’s assessment of the alleged error. Every year, the IRS mails millions of math error notices to taxpayers that propose to adjust their tax liabilities. But the notices typically don’t explain the reasons for the adjustments, and some are never received by the taxpayer due to lost mail.
The IRS isn’t currently required to inform taxpayers that they must dispute the adjustments within 60 days if they disagree or generally forfeit their right to do so. That means many taxpayers fail to dispute the IRS assessment. The bill requires the IRS to ensure all math error notices provide a clear explanation of the alleged error, including showing the mathematical change and informing taxpayers they have 60 days to challenge the math error. The bill also creates a pilot program that sends a trial number of notices by certified mail and requires a report to Congress on the impact of the pilot program.
“President Trump is ensuring taxpayers get the fair treatment they deserve,” said House Ways and Means Committee chairman Jason Smith, R-Missouri, in a statement Monday. “Americans must show the math on their tax return, and now the IRS has to as well. Instead of having to take the word of the federal government’s most feared agency, taxpayers will have the information to successfully challenge the IRS. The Ways and Means Committee has been tireless in finding opportunities to strengthen taxpayer rights at the IRS.”
He thanked Feenstra for the bill. “I’m thrilled that President Trump signed my bill to hold the IRS accountable to Iowa taxpayers,” Feenstra said in a statement. “For too long, the IRS has caused headaches and confusion when a taxpayer makes a fixable mistake on their taxes, providing no explanation as to why a refund is different than expected, or how to correct an error. This law will require the IRS to clearly communicate tax-filing errors to Iowans and help them not only understand the mistake but also challenge it if they see fit.”
