Small Business Taxpayer Bill of Rights Act of 2025
HB2782, titled the Small Business Taxpayer Bill of Rights Act of 2025, would create a package of taxpayer protections and procedural changes aimed at small businesses interacting with the IRS. The bill expands eligibility for certain fee-shifting rules so more small businesses can recover costs in IRS disputes, increases civil damages and criminal penalties for unauthorized IRS conduct and disclosures, and extends the time limits for bringing some taxpayer lawsuits. It also gives taxpayers stronger procedural rights in IRS appeals, including limits on ex parte communications, a right to an independent conference, broader access to mediation and arbitration, and a prohibition on the IRS raising new issues on appeal that were not part of the original determination.
The bill also restricts IRS collection and enforcement tools in several ways. It limits liens against principal residences unless the Treasury Department makes written findings that other property is insufficient and that enforcement will not create economic hardship, and it requires the IRS to consider the viability of a business and harm to individuals before releasing a levy for business taxpayers facing hardship. In addition, it creates a deduction for certain audit-related expenses incurred in National Research Program audits when the audit does not increase tax liability, repeals the partial-payment requirement for offers-in-compromise, and sets a 10-year term for the National Taxpayer Advocate.
Overall, the bill appears designed to shift IRS procedures toward greater taxpayer protections, especially for small businesses, and to increase accountability for IRS employees and disclosure violations. Because there were no committee transcripts or recorded votes provided, there is no documented debate or formal vote history to gauge support or opposition in the available materials. The bill’s structure and findings suggest a pro-taxpayer, anti-abuse policy approach rather than a revenue-raising measure.
The main points of contention likely center on whether the bill goes too far in constraining IRS enforcement and expanding remedies against the agency, versus whether those changes are necessary to protect small businesses from overreach. Provisions that bar ex parte communications, limit new issues on appeal, restrict principal-residence liens, and require discrimination reviews of IRS selection criteria could draw concern from those who favor broader IRS discretion or worry about administrative burden. Supporters would likely emphasize fairness, due process, and relief for small businesses facing audits, appeals, levies, and disclosure violations.
The bill would amend multiple provisions of the Internal Revenue Code and related IRS oversight statutes, including sections governing cost awards, civil damages, unauthorized disclosures, appeals, liens, offers-in-compromise, and taxpayer advocacy. It would create new taxpayer rights and remedies, raise penalty amounts, extend limitations periods for certain claims, and impose new procedural constraints on IRS enforcement and appeals. The measure would primarily affect small businesses, taxpayers in IRS disputes, IRS employees, the Independent Office of Appeals, the Treasury Inspector General for Tax Administration, and the National Taxpayer Advocate.
Based on the bill text alone, the measure has a strongly pro-taxpayer and pro-small-business orientation, with an emphasis on limiting IRS overreach and improving procedural fairness. No committee discussion or vote record was provided, so there is no direct evidence of bipartisan support, opposition, or amendments in the available materials. The absence of recorded debate means sentiment can only be inferred from the bill’s protective structure and enforcement limits.
Likely areas of contention include the bill’s restrictions on IRS enforcement authority, especially the limits on principal-residence liens, the ban on ex parte communications, and the prohibition on raising new issues on appeal. Another potential dispute is the expansion of damages and penalties against IRS employees and the requirement that TIGTA review IRS selection criteria for possible discrimination based on race, religion, or political ideology. Supporters would likely argue these provisions protect due process and curb abuse, while critics may view them as weakening tax administration and adding litigation and compliance burdens.