The Taxpayer Assistance and Service Act cleared the Senate Finance Committee on a 26-1 vote on July 30 and now awaits consideration by the full Senate.
Two things distinguish it from most tax proposals. It was developed jointly by the committee’s chair and ranking member over more than a year, and it carries genuine bipartisan support. It also faces a deadline. If Congress does not act before this session concludes, the legislation resets and would have to begin again in 2027.
For most businesses, one provision carries the greatest operational impact.
Information return deadlines would accelerate
Form 1099-series statements currently go to recipients by January 31, while the returns are e-filed with the IRS by March 31. The TAS Act would consolidate both into a single January 31 deadline.
The change would apply to forms reporting contractor payments, dividends, interest, retirement plan distributions, and payment card and third-party network transactions.
For businesses that work with a significant number of subcontractors, this compresses vendor verification, W-9 collection, and payment reconciliation into a materially shorter window.
Expanded options on refund claims
Under current law, the IRS is not required to act on a refund claim. Taxpayers may file suit after six months without a response, but no rule compels a determination.
The TAS Act would require the IRS to issue a determination within 12 months and would permit taxpayers to appeal a denial to the independent Office of Appeals. It would also expand the Tax Court’s jurisdiction to cover refund claims, adding a venue alongside federal district courts and the Court of Federal Claims.
A lower e-filing threshold for partnerships
The e-filing requirement for partnerships would drop from 100 partners to 50 partners, or $1 million in assets. Smaller partnerships currently filing on paper would need to transition.
Timeliness for electronic submissions
The bill would extend a version of the mailbox rule to electronic filings. A submission would be considered timely if authorized for filing by the due date and received within three business days.
Standards for paid preparers
The TAS Act would establish education and certification requirements for paid preparers, with attorneys, CPAs, and enrolled agents generally exempt as specified practitioners. The current version removes an exception, present in earlier drafts, for employees supervised by those credentialed professionals.
IRS modernization
A set of provisions would expand IRS online capability, including taxpayer accounts holding six years of notices and correspondence, electronic response to IRS notices, and public dashboards tracking refunds, call wait times, and processing backlogs.
Legislative outlook
The House has pursued a different approach, advancing more than 20 stand-alone tax administration bills this year rather than a single package. The two efforts address much of the same ground, but differences in detail and scope would need to be reconciled.
Enactment this year remains possible. The most likely window is a lame-duck session following the November elections.
What this means for you
If enacted, the information return provisions would take effect for a filing season that is already close. Whether or not the bill passes, incomplete vendor records and unverified W-9s create the same problem in January. Addressing them in the fall is considerably easier than addressing them at the deadline.
We are following the TAS Act and will advise our clients if it is enacted.
To review where your vendor records stand before year-end, contact your Ericksen Krentel professional or call us at (504) 486-7275.