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S. 1054Senate118th Congress (2023-2025)In Committee

IRS Improper Payments Act

Sponsored by Mike BraunSen. Mike Braun (R-IN)
Introduced March 29, 2023

AI-Generated Summary

Updated January 20, 2026 at 5:24 AM UTC

The IRS Improper Payments Act aims to cut incorrect tax refunds and credits issued by the Internal Revenue Service. It requires the Treasury and the IRS to set annual targets for reducing such payments, publish detailed data online, and hold officials accountable through regular reporting. The law also involves the Treasury Inspector General in assessing risk and recommending improvements, and directs the Treasury to develop policy proposals to further prevent errors, waste, fraud, and abuse.

Key Provisions

  • Defines an “improper tax payment” as any overpayment refund or credit that should not have been made or was made in the wrong amount.
  • Treasury, working with the IRS, must establish annual targets to reduce improper payments within 90 days of enactment.
  • The Treasury must publish, on the internet, annual data on improper payments, including amounts, rates, causes, and recovery figures, within 180 days and each year thereafter.
  • The IRS Commissioner must designate an official responsible for meeting the reduction targets and for reporting progress.
  • The designated official must submit annual reports to the OMB and the Senate Finance and House Ways and Means committees detailing methodology, plans, and impact on taxpayer services.
  • The Treasury Inspector General for Tax Administration must assess risk, recommend oversight, and suggest methodological changes within 60 days of each annual report.
  • If the IRS fails to improve for two consecutive years, a remedial plan must be developed and reviewed, with input from the Inspector General and the IRS CFO.
  • The Treasury, in consultation with the IRS and the Inspector General, must develop policy recommendations and possible legislative proposals to further reduce improper payments, to be included in the President’s budget starting FY2024.

Legislative Activity

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SenateIntro Referral Latest Action

Read twice and referred to the Committee on Homeland Security and Governmental Affairs.

Homeland Security and Governmental Affairs Committee

March 29, 2023

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SenateIntro Referral

Introduced in Senate

March 29, 2023

SenateIntro Referral

Read twice and referred to the Committee on Homeland Security and Governmental Affairs.

Homeland Security and Governmental Affairs Committee

March 29, 2023

Bill Text

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Introduced in SenateIssued March 29, 2023

II

118th CONGRESS

1st Session

S. 1054

IN THE SENATE OF THE UNITED STATES

March 29, 2023

Mr. Braun introduced the following bill; which was read twice and referred to the Committee on Homeland Security and Governmental Affairs

A BILL

To reduce improper payments and eliminate waste in Federal programs, and for other purposes.

1.

Short title

This Act may be cited as the IRS Improper Payments Act.

2.

Findings and purpose

(a)

Findings

Congress finds that when the Internal Revenue Service makes payments to taxpayers, the Internal Revenue Services must make every effort to confirm that the right recipient is receiving the right payment for the right reason at the right time.

(b)

Purpose

The purpose of this Act is to—

(1)

reduce improper tax payments by the Internal Revenue Service—

(A)

by intensifying efforts to eliminate payment error, waste, fraud, and abuse; and

(B)

by continuing to ensure that the Internal Revenue Service provides accessible taxpayer services;

(2)

adopt a comprehensive set of policies, including—

(A)

transparency of significant improper tax payments; and

(B)

accountability for reducing improper tax payments; and

(3)

protect taxpayer services.

3.

Improper tax payment defined

For purposes of this Act, the term improper tax payment means any credit or refund of an overpayment of a tax imposed under the Internal Revenue Code of 1986 that should not have been made or that was made in an incorrect amount.

4.

Transparency

(a)

In general

Not later than 90 days after the date of enactment of this section, the Secretary of the Treasury shall establish, in coordination with the Commissioner of Internal Revenue, annual targets for reducing improper tax payments made by the Internal Revenue Service.

(b)

Published information

(1)

In general

Not later than 180 days after the date of enactment of this section, and annually thereafter, the Secretary of the Treasury shall publish on the internet information about improper tax payments made by the Internal Revenue Service.

(2)

Contents

The information published under paragraph (1) shall include, subject to Federal privacy policies and to the extent permitted by law—

(A)

the name of the accountable official designated under section 5(a);

(B)

rates and amounts as of the date of enactment of this section, and historical rates and amounts, of improper tax payments made by the Internal Revenue Service, including, if known and appropriate, the causes of the improper tax payments;

(C)

rates and amounts as of the date of enactment of this section, and historical rates and amounts, of the recovery of improper tax payments (estimated on the basis of applicable samples where appropriate); and

(D)

the annual targets for reducing improper tax payments.

(c)

Methodology

The methodology used for identifying and measuring improper tax payments under this section shall meet the requirement of section 3352(c)(1)(A) of title 31, United States Code.

(d)

Links

The Commissioner of Internal Revenue shall prominently display on the homepage of the website of the Internal Revenue Service a link to internet-based resources for addressing improper tax payments, including the information published under subsection (b)(1).

5.

Accountability and coordination

(a)

Accountable officials

Not later than 120 days after the date of enactment of this section, the Commissioner of Internal Revenue shall designate an official to be accountable for meeting the reduction targets under section 4(a) without unduly burdening taxpayer services.

(b)

Report

(1)

In general

Not later than 180 days after the date of enactment of this section, and annually thereafter, the official who is designated under subsection (a) shall provide the Director of the Office of Management and Budget and the appropriate congressional committees a report that includes—

(A)

the methodology used for identifying and measuring improper tax payments under section 4(c);

(B)

the plans for meeting the reduction targets under section 4(a); and

(C)

the plans and supporting analysis for ensuring that initiatives undertaken in accordance with this title do not unduly burden taxpayer services.

(2)

Appropriate congressional committees

For purposes of paragraph (1), the term appropriate congressional committees means the Committee on Finance of the Senate and the Committee on Ways and Means of the House of Representatives.

(c)

Duties of inspector general

Not later than 60 days after the date on which the annual report required under subsection (b) is submitted, the Treasury Inspector General for Tax Administration shall—

(1)

assess the level of risk for improper tax payments by the Internal Revenue Service;

(2)

determine the extent of oversight warranted (in addition to oversight requirements under section 3353 of title 31, United States Code); and

(3)

provide the Commissioner of Internal Revenue with recommendations, if any, for modifying the methodology, improper tax payment reduction plans, or taxpayer services.

(d)

Agency failure

(1)

In general

If the Internal Revenue Service does not demonstrate an improvement in reducing improper tax payments, fails to develop a plan to meet reduction targets under subsection (b)(1)(B), or fails to implement the plans described in subsection (b)(1)(C) for not less than 2 consecutive years, the official designated under subsection (a) shall submit to the Commissioner of Internal Revenue, the Treasury Inspector General for Tax Administration, and the Chief Financial Officer of the Internal Revenue Service a report that—

(A)

describe the likely causes of the lack or improvement or failure; and

(B)

proposes a remedial plan.

(2)

Review

Annually, the Commissioner of Internal Revenue shall, with respect to a remedial plan proposed under paragraph (1)(B)—

(A)

review the remedial plan; and

(B)

in consultation with the Treasury Inspector General for Tax Administration and Chief Financial Officer of the Internal Revenue Service, forward the remedial plan and any additional comments and analysis to the Director of the Office of Management and Budget.

6.

Policy proposals

(a)

In general

Not later than 180 days after the date of enactment of this section, the Secretary of the Treasury, in consultation with the Commissioner of Internal Revenue and the Treasury Inspector General for Tax Administration, shall develop policy recommendations, including potential legislative proposals, designed to reduce improper tax payments, including improper tax payments caused by error, waste, fraud, and abuse, made by the Internal Revenue Service.

(b)

Inclusion

The recommendations developed under subsection (a) shall be included, as appropriate, in the budget of the President under section 1105(a) of title 31, United States Code, for fiscal year 2024 and each fiscal year thereafter.