Bill · S. 1386· Senate(119-S-1386)
Small Business Taxpayer Bill of Rights Act of 2025
- Introduced
- 4/9/2025
- Last activity
- 4/9/2025 — Read twice and referred to the Committee on Finance.
- Sponsored by
- John Cornyn
- Cosponsors
- None
- Introduced
- In Committee
What this bill would do
The Small Business Taxpayer Bill of Rights Act of 2025 aims to establish new protections and rights for small business owners dealing with the IRS. It modifies standards for awarding costs and fees, increases civil damages for reckless or intentional disregard of revenue laws, and increases penalties for certain unauthorized disclosures. The bill also implements bans on ex parte discussions and raising new issues during appeals. Additionally, it provides protections for principal residences against liens and introduces new procedures for dispute resolution and economic hardship determinations.
Yes· 3 of 6
Would business owners be better off under this?+9
The bill provides substantial legal and financial protections specifically targeted at small business owners.
Does this make it easier to run a small business?+8
The bill significantly enhances legal protections, damages, and dispute resolution rights for small business owners facing the IRS.
Does this protect the right to fair treatment by the courts?+7
The bill enhances due process for small businesses through new appeal rules and dispute resolution options.
The opposite
Does this give the federal government more power?-3
The bill increases federal oversight and penalties for IRS employees.
Who it would affect, and how
Potential Positive Impacts for People
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Increased Financial Recourse for Misconduct: The bill increases civil damages for reckless or intentional disregard of internal revenue laws from $1,000,000 to $5,000,000, and for negligence from $100,000 to $500,000 (Section 3).
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Extended Time to Take Legal Action: The time allowed to bring actions regarding reckless or intentional disregard of laws is extended from 2 years to 5 years (Section 3).
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Enhanced Protection Against Unauthorized Disclosures: Damages for unauthorized inspection or disclosure of returns are increased from $1,000 to $10,000 (Section 5).
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Fairer Appeal Processes: The bill prohibits the IRS from raising new issues, such as new theories or deficiencies not included in the initial determination, during an internal appeal (Section 10).
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Protection of Principal Residences: The bill limits the enforcement of liens against a taxpayer's principal residence unless the Secretary determines all other property is insufficient and it won't cause economic hardship (Section 11).
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Support for Small Business Viability: When deciding to release an IRS levy, the Secretary must now consider the economic viability of the business and the potential harm if the business is liquidated (Section 16).
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Audit Expense Deductions: Individuals can claim a deduction of up to $5,000 for certain qualified expenses related to audits that result in no increase in tax liability (Section 14).
Potential Negative Impacts for People
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Increased Penalties for Employees: Penalties for certain offenses by officers and employees in connection with revenue laws are increased (Section 4).
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Mandatory Employment Termination: IRS employees may face mandatory termination for committing prohibited ex parte communications (Section 6).
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Mandatory Unpaid Leave: Employees may be required to take unpaid administrative leave for at least 90 days if the Commissioner takes a personnel action that is not termination (Section 12).
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Cost Sharing for Mediation: Taxpayers electing to use independent mediators in dispute resolutions are required to share the costs equally with the IRS Independent Office of Appeals (Section 8).
Groups and Interests Ranking
Every group the model scored this bill for, from -10 to +10. Hover a score for the reason it gave.
- Governance And Ideology
- Improves Due Process+7Improves Privacy Rights+6Improves Government Transparency+5Increases Federal Power-3
- Economy And Finance
- Improves Small Business Support+8Reduces Small Business Taxes+3
- Demographic And Interest Groups
- Good For Business Owners+9
- 4/9/2025
- Read twice and referred to the Committee on Finance.
- Introduced in Senate
One bill Congress.gov lists as related to this one — companions in the other chamber, earlier versions, and bills this one absorbed or was folded into.