The Senate Just Passed 65 IRS Reforms: What the Taxpayer Assistance and Service Act Could Change for You

On September 30, 2026, the U.S. Senate unanimously passed the Taxpayer Assistance and Service Act, a package of 65 bipartisan reforms aimed at modernizing the IRS and strengthening taxpayer rights. The bill now moves to the House, where it could be taken up during the lame-duck session after November’s midterm elections. If you owe the IRS, are behind on filing, or have ever sat on hold with the agency for an hour only to get disconnected, this bill was written with situations like yours in mind.

What Is the TAS Act and Why Does It Matter?

The Taxpayer Assistance and Service Act, known as the TAS Act, is a broad legislative package introduced by Senate Finance Committee Chairman Mike Crapo (R-Idaho) and Ranking Member Ron Wyden (D-Oregon). The bill advanced out of the Senate Finance Committee by a vote of 26 to 1 in July 2026, earned the endorsement of the nonpartisan National Taxpayer Advocate, and passed the full Senate without a single dissenting vote.

This is not a bill that changes your tax rates, your deductions, or how your taxable income is calculated. What it would change is how the IRS deals with you: how it answers the phone, how quickly it processes your paperwork, what options it is required to tell you about, and how you can fight back when something goes wrong. The National Taxpayer Advocate has said that, if enacted, the TAS Act would rank alongside the IRS Restructuring and Reform Act of 1998 and the Taxpayer First Act of 2019 as one of the most significant pieces of taxpayer rights legislation in recent history.

It is not law yet. The House has not voted on it. But the provisions it contains tell you exactly what Congress thinks is broken, and that is useful information right now.

Better Phone Service and Real Transparency on Wait Times

If you have ever tried to reach the IRS by phone, you already know the problem. The TAS Act sets a goal: by 2028, any taxpayer waiting more than five minutes on a major IRS telephone line should be offered a callback rather than forced to wait on hold. That is a meaningful shift in how the agency is expected to treat your time.

The bill would also require the IRS to publish a public online dashboard showing call volumes, wait times, and callback availability for each phone line, along with automated call screening and weekly reports on processing backlogs of more than 21 days. Right now, there is no reliable public window into how badly backed up the IRS is. This provision would create one. If you are waiting on a response to a notice, a payment plan request, or a refund claim, you would finally have a way to see whether your case is sitting in a known backlog or genuinely stalled.

The bill would also require the IRS to use optical character recognition technology to digitize paper returns and correspondence for faster electronic processing. If you filed a paper return or mailed in a response to an IRS notice, your documents currently have to be manually keyed in by an IRS employee. This reform would speed that process significantly.

More Rights When You Owe and Cannot Pay

This is the section most directly relevant to anyone dealing with IRS collections.

The IRS would have to tell you about your options

Under current rules, the IRS does not have a legal obligation to proactively tell you about collection alternatives when you appear to be in financial hardship. The TAS Act would change that. It would require the IRS to inform taxpayers who appear to be experiencing financial hardship about alternatives such as offers in compromise, partial-payment installment agreements, and currently-not-collectible status. The Taxpayer Advocate Service has noted that many taxpayers set up standard installment agreements without realizing they might qualify for something better, simply because no one told them the other options existed.

Installment agreement fees could be waived for lower-income taxpayers

The bill would eliminate installment-agreement user fees for taxpayers with income at or below 250 percent of the applicable federal poverty level. Setting up a payment plan with the IRS currently comes with a fee that varies based on how you apply and whether you use direct debit. For taxpayers already stretched thin, that fee is a barrier. The TAS Act would remove it for those who qualify.

Earned income tax credit refunds would be protected in some situations

If your account has already been classified as currently not collectible, meaning the IRS has determined you cannot afford to pay, the bill would automatically protect the earned income tax credit portion of your refund from being seized to offset that tax debt. Under current rules, the IRS can still offset your refund even after placing your account in currently-not-collectible status. This provision would close that gap for EITC refunds.

A faster timeline for refund claim decisions

If you have filed a claim for a refund and the IRS has simply sat on it, the TAS Act would require the agency to act on qualifying refund claims within 12 months. If the IRS fails to respond in time, you could treat the inaction as a denial and appeal it, either through IRS Appeals or the U.S. Tax Court. Right now, taxpayers in this situation often have no clear path forward.

Stronger Protections in Disputes and Appeals

The TAS Act would also strengthen the independence of the IRS Office of Appeals and the Taxpayer Advocate Service itself. For taxpayers fighting the IRS over an audit result, a penalty, or a denied offer in compromise, these are the offices that are supposed to be in your corner or at least give you a fair hearing.

On the penalty side, the bill would require electronic signatures for penalty approvals under Internal Revenue Code Section 6751(b). This is a safeguard against lower-level auditors using proposed penalties as leverage during routine audits without proper supervisory sign-off. If you have received a penalty that felt like it came out of nowhere during an audit, this provision is designed to prevent exactly that.

The bill would also permit you to appeal when the IRS labels an offer in compromise “non-processable,” a designation that currently leaves many taxpayers with no formal recourse. And it would expand Tax Court authority, including formalizing equitable tolling protections so that minor procedural delays do not cause you to lose your right to a court hearing entirely.

Crackdown on Unqualified Tax Preparers

One of the most talked-about sections of the TAS Act has to do with the people who prepare tax returns for pay. Right now, anyone can hang out a shingle as a tax preparer without passing a competency test, completing any training, or undergoing a background check. CPAs, enrolled agents, and attorneys are already regulated. Millions of other paid preparers are not.

The TAS Act would require non-credentialed paid preparers to pass suitability and criminal background checks, including a review of their own personal tax compliance, and to complete up to 18 hours of continuing education annually covering ethics and tax law. The IRS would also gain the authority to suspend or revoke a preparer’s Preparer Tax Identification Number for incompetence, fraud, or tax noncompliance, and to impose monetary penalties.

Why does this matter to you as a taxpayer? Because errors or fraud by an unqualified preparer can result in penalties, audits, and collections that land on you, not the preparer. A return that is filed incorrectly because your preparer did not know what they were doing is still your liability. This reform is designed to reduce the risk that someone is taking advantage of you before you ever get near the IRS.

What Happens Next, and What You Should Do Now

The TAS Act passed the Senate but is not law. The House was in recess at the time of Senate passage and is not expected to return until November. Tax professionals and advocacy groups are pushing for House passage during the lame-duck session before the congressional term ends. There is no guarantee that will happen.

What that means for you right now: nothing in this bill changes your current filing requirements, payment deadlines, or obligations to respond to IRS notices. If you have a notice sitting on your kitchen counter, a missed filing year, or a balance you cannot pay, those situations need attention today, not after legislation clears Congress.

But the TAS Act does signal clearly that Congress recognizes the IRS is often failing the people who need help most. The bill’s hardship notification requirement, its pushback on unchecked penalties, and its expanded appeal rights all reflect problems that taxpayers with IRS debt encounter regularly. If any of those situations sound familiar, this is a good time to understand what options may already be available to you, depending on your circumstances.

Clear Start Tax works with individuals and businesses who owe the IRS and need a clear path forward. Whether you are facing a collections notice, have unfiled returns, or are unsure which resolution option you may qualify for, speaking with a tax professional is the right first step. A free consultation costs nothing and can tell you a great deal about where you stand.