IRS Math and Taxpayer Help Act of 2025 Needs Amendment for Third-Party Reporting Errors
A 2025 law, the IRS Math and Taxpayer Help Act, designed to provide clearer explanations for math error adjustments on tax notices, requires an amendment. The current legislation, effective for notices sent after November 25 of this year, mandates that the IRS specify the line on a federal return where an error occurred and provide a clear deadline for requesting a tax assessment abatement. However, the law does not address incorrect figures reported to the IRS by third parties such as employers, banks, or brokers. This omission means there is no formal process for taxpayers to dispute these third-party figures, assign responsibility for correction, or set a response deadline. The issue is becoming more critical with the advent of digital assets, as brokers began reporting gross proceeds on Form 1099-DA for 2025 sales and will add cost basis for covered assets sold in 2026. Misreporting in these areas can trigger automated IRS notices proposing additional tax, highlighting the need for a defined process to...
