The House advanced a series of bipartisan bills to improve tax administration via a fast-track procedure on Monday. The chamber also advanced bills providing targeted assistance to certain types of taxpayers, including disaster victims and sexual assault survivors, and a measure benefiting IRS whistleblowers.
Bipartisan Focus on Tax Administration
The Taxpayer Experience Improvement Act, H.R. 7971, calls for improvements to the IRS website and phone callback technology. Representative David Schweikert (R-AZ), who headed up the bill, said the legislation would require the IRS to provide taxpayers with enhanced online access, allowing them to see amounts owed, refunds, and where they are in the process. It also provides for an IRS phone line “dashboard” so callers can view actual wait times and “don’t have to be sitting there on hold for hours.”
The BARCODE Efficiency Act, H.R. 6956, would require certain paper tax returns to include a scannable code. In addition, the bill requires the IRS to adopt optical character recognition technology for scanning paper submissions. Representative Brad Schneider (D-IL), who headed up the bill, noted that “[m]illions of Americans still use paper returns, including both returns prepared electronically but printed and filed on paper and any handwritten returns and paper correspondence.” In 2023, the IRS received about 10 million paper returns, he added. Enhancing scanning capabilities will expedite paper return processing, Schneider explained.
A third bill, the Taxpayer Notification and Privacy Act, H.R. 6495, would require the IRS to provide notice to taxpayers when a third party seeks their tax information. Representative Jimmy Panetta (D-CA), who co-led the bill, said the suggestion comes after the National Taxpayer Advocate Service warned the IRS’ current process for notifying taxpayers of third-party requests for their information “falls short.” Co-sponsor Representative Greg Steube (R-FL) added that “too often those notices aren’t specific enough to let a person meaningfully respond.”
All three bills advanced via a voice vote.
Taxpayer Relief Measures
The House approved the Doug LaMalfa Federal Disaster Tax Relief Certainty Act, H.R. 5366, which would extend an existing provision that allows taxpayers to deduct personal casualty losses after a natural disaster. It also would allow taxpayers to exclude from gross income compensation for damages due to certain wildfires. Steube, who headed up the bill, explained that it “provides certainty to disaster victims by extending and codifying commonsense tax relief for Americans impacted by federally declared disasters.”
Also advancing was the Survivor Justice Tax Prevention Act, H.R. 2347, which would exclude non-punitive damages received by sexual assault survivors from gross income. Under current law, the IRS requires “proof of observable physical harm like bruises, cuts, or some other apparent evidence of damages to qualify that settlement as tax-free,” explained bill sponsor Representative Lloyd Smucker (R-PA). However, “sexual violence doesn’t always leave visible scars,” he added. Co-sponsor Representative Gwen Moore (D-WI) described the bill as taking a “belt-and-suspenders approach to ensure that settlement payments, whether arising from a court judgment, private arbitration or mediation, that are made on account of sexual abuse, are not subject to taxation.”
The New Opportunities for Business Ownership and Self-Sufficiency Act, H.R. 6431, addresses Self-Employment Assistance programs — state programs that provide certain individuals with an allowance to help them establish a small business, rather than regular unemployment compensation benefits. The bill would revise IRC § Section 3306(t) to expand eligibility for state-administered programs by increasing the percentage limit. The program “give[s] workers the choice to use their unemployment insurance weeks, as necessary, to build their businesses, rather than being locked into job searches that don’t fit their skills, their needs, or their potential,” explained Panetta. The revisions would allow for more participants and earlier opt-in, he added.
Two other bills providing relief to taxpayers in specific occupations also advanced. The SEED Act, H.R. 5334, would allow early child educators to take the educator expense deduction — which increased to $350 for the 2026 tax year. The Clergy Act, H.R. 227, addresses a tax-adjacent matter — Social Security coverage of clergy members. These individuals can claim an exemption from Social Security, but the bill would provide a two-year window for them to revoke their exemption.
All but the Clergy Act advanced with a voice vote. However, the Clergy Act garnered wide support, advancing after a 350-5 vote.
Whistleblowers
The IRS Whistleblower Program Improvement Act, H.R. 7959, which advanced with a 346-10 vote, would incentivize whistleblower reporting by requiring payment of interest on certain whistleblower awards and allowing whistleblowers to deduct attorney fees. The bill also would allow whistleblowers to proceed anonymously in the Tax Court and require de novo review of whistleblower awards.
Representative Mike Thompson (D-CA), who co-led the bill, emphasized on the House floor the importance of whistleblowers given recent cuts to the IRS. “Between staffing losses and reduced enforcement capacity, the reality is that the system is not catching everything that it should,” he said. “Whether we say it out loud or not, we are increasingly relying on whistleblowers to help fill that gap.”
Thompson said the bill would promote whistleblowing by better protecting whistleblower privacy, ensuring ” meaningful, independent review of their claims,” and addressing awards delays.
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