Sponsors (2)
The bill increases taxpayer notice, privacy protections, and procedural fairness by giving taxpayers at least 45 days to respond before the IRS contacts third parties, but it may slow some IRS processes, create administrative burdens for the IRS and third parties, and contains an exception that could weaken the protections in practice.
Taxpayers will receive an itemized notice of each record the IRS intends to request from third parties and at least 45 days to respond or provide the information themselves before the IRS contacts those third parties.
Taxpayers will face fewer unnecessary third‑party contacts because the IRS is encouraged to seek information from the taxpayer first, reducing privacy intrusions and exposure of personal financial data.
The bill increases government transparency and procedural fairness by requiring clearer notices and a defined minimum response period before third‑party outreach.
Taxpayers' protections can be undercut because the Secretary may omit specificity when deemed necessary, allowing the IRS to continue broad third‑party contacts in some cases.
Taxpayers and federal employees could see slower IRS investigations and longer audit timelines because the IRS must wait at least 45 days before contacting third parties.
The IRS will face added administrative work (drafting itemized notices and tracking deadlines), which could raise implementation and compliance costs for the agency.
Based on analysis of 2 sections of legislative text.
Requires IRS advance notices of third‑party contacts to specify each item it will seek (when the taxpayer could reasonably provide it) and give at least 45 days to respond before contacting third parties.
Introduced July 31, 2025 by John A. Barrasso · Last progress July 31, 2025
Requires the IRS to tell a taxpayer, when giving advance notice that it may contact third parties, exactly which items of information it plans to seek from those third parties (when those items could reasonably be provided by the taxpayer) and to give the taxpayer a reasonable opportunity — at least 45 days (longer for reasonable cause) — to respond or provide the information before the IRS makes third‑party contacts. The change allows an exception if the IRS head determines specificity would defeat the purpose of obtaining the third‑party information and takes effect for notices issued more than 12 months after enactment.