Senate Passes the Taxpayer Assistance and Service Act: What Small Businesses and Nonprofits Should Know
If you have ever waited on hold with the IRS, received a confusing notice, or wondered why an estimated tax payment is due in the middle of June, this one is worth a few minutes of your time. On September 30, 2026, the U.S. Senate passed the Taxpayer Assistance and Service Act, often called the TAS Act, by unanimous consent. It is not law yet, but it is one of the broadest bipartisan IRS reform packages we have seen in years, and several pieces of it are aimed squarely at small businesses and tax-exempt organizations.
This post is general information, not individual tax or legal advice. Please talk with a qualified advisor about your specific situation.
What the Senate passed
According to reporting from Accounting Today and the Journal of Accountancy, the bill contains 65 provisions focused on modernizing the IRS and strengthening taxpayer rights. Much of it is about the basics of dealing with the agency: more electronic access to your own tax information, digitized correspondence and returns, better online accounts, callback technology so you are not stuck on hold, and more transparency about IRS processing backlogs. The Senate Finance Committee says the bill also targets predatory tax preparation schemes that take advantage of low-income families.
The bill had already cleared the Senate Finance Committee earlier this year with strong bipartisan support, and it has the backing of the National Taxpayer Advocate and the AICPA.
Provisions that matter most for small businesses
Accounting Today's summary lists a dedicated small business title. If these provisions survive in the final law, here is what they would mean in everyday terms:
More sensible estimated tax dates. The second-quarter payment would move from June 15 to July 15, and the third-quarter payment from September 15 to October 15, spacing payments more evenly through the year.
More time to elect S corporation status. The deadline to make an S election would line up with the due date of the tax return, which would help owners who realize late that the election makes sense.
A penalty safe harbor for those who pay at least 125% of their prior-year liability, as described in the bill summary.
The "mailbox rule" for electronic filings and payments. Today, a paper return postmarked on time is treated as timely; the bill would give the same protection to electronic submissions.
Voluntary withholding agreements for payments to independent contractors, which could help contractors avoid a surprise tax bill.
Fairer third-party contacts. Before contacting others about you, the IRS would have to spell out what it needs and give you 45 days to respond.
The bill would also require supervisory approval before penalties are assessed, require math-error notices to be written in plain language with deadlines in bold, and allow extended filing deadlines of up to 120 days for state-declared disasters.
An important protection for nonprofits and churches
The NonProfit Times reports that an amendment from Senators James Lankford and Raphael Warnock adds determinations of tax-exempt status to the list of IRS decisions an organization can appeal. That would cover both a denied application for exemption and the revocation of an existing exemption. Nonprofit advocates, including Independent Sector, see this as giving charities and religious organizations the same due-process rights other taxpayers have when they disagree with the IRS.
What happens next, and what to do now
The bill now goes to the House of Representatives, which is in recess and not expected to return until November. With limited working days left in this Congress, there is no guarantee it becomes law this year, and details could change along the way. That means today's rules still apply. Here is how we suggest you respond:
Keep your current deadlines. If you filed an extension, your 2025 individual return is still due October 15, 2026, and the fourth-quarter estimated payment is still due in January.
Do not rely on the proposed S election change yet. If you are thinking about S corporation status for 2027, plan to file on time under current rules.
Keep good records of electronic filings and payments, including confirmation numbers and dates.
Nonprofits and churches should keep their exemption documents, governing documents, and annual filings organized so they can respond quickly to any IRS question.
Watch for updates. We will share what changes if the House acts.
We are here to help
Tax administration news is not exciting, but it can change when you pay, how you file, and what rights you have when something goes wrong. If you would like help planning your estimated payments, deciding whether an S election fits your business, or getting your nonprofit's records in order, reach out to us at Count The Cost Accounting. We would be glad to walk through it with you.
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