H.R. 9496 — End Tax Penalties on American Hostages Act

This section postpones tax filing deadlines, interest accrual, penalties, and refund determinations for United States nationals unlawfully or wrongfully detained abroad or held hostage abroad, as determined under 22 U.S.C. 1741, and for their spouses. It requires the Secretary of State and the Attorney General to provide identifying lists to the Treasury Secretary annually beginning January 1, 2027, directs updates to Treasury databases, and requires abatement and refund of penalties assessed before identification.

This section postpones tax deadlines and suspends interest, penalties, and collection activities for US nationals unlawfully or wrongfully detained abroad or held hostage abroad, as determined under the Robert Levinson Hostage Recovery and Hostage-Taking Accountability Act. It extends these benefits to their spouses and requires the Secretary of State and Attorney General to provide identifying lists to Treasury by January 1, 2027, and annually thereafter. The Secretary must abate and refund any penalties or interest assessed before such identification and update Treasury systems to implement the suspensions. The changes apply to taxable years ending after the date of enactment.

This section postpones tax filing, payment, and other deadlines under section 7508(a)(1), and suspends related interest, penalties, and collection activities, for the period of unlawful or wrongful detention abroad or hostage status for applicable individuals and their spouses. It defines applicable individuals by reference to determinations under 22 U.S.C. 1741 and the Hostage Recovery Fusion Cell, requires the Secretary of State and Attorney General to transmit identifying lists to Treasury beginning January 1, 2027, directs updates to Treasury systems, and requires abatement and refund of penalties assessed before identification.

This section postpones tax filing deadlines, interest and penalty accruals, and collection activities for United States nationals unlawfully or wrongfully detained abroad, as determined under 22 U.S.C. 1741, or held hostage abroad. It applies the postponement to their spouses, requires the Secretary of State and Attorney General to provide identifying information to the Treasury Secretary annually beginning January 1, 2027, and mandates abatement and refund of any penalties assessed before identification. The changes apply to taxable years ending after enactment.

This section establishes a program, by January 1, 2027, under which the IRS (in consultation with the Secretary of State and Attorney General) must identify and notify eligible individuals—or their spouses and dependents—of the opportunity to obtain refunds or abatements of penalties, interest, and additional taxes paid for taxable years ending during the period beginning January 1, 2021, and ending on the date of enactment, where such amounts arose from determinations that acts described in section 7508(a)(1) were not timely performed. It extends the period of limitations for such refunds to one year after notice is provided.

This section establishes a program, by January 1, 2027, under which the Secretary (in consultation with the Secretary of State and Attorney General) must identify and notify eligible individuals—those who paid interest, penalties, or additions to tax for taxable years ending during the period beginning January 1, 2021, and ending on the date of enactment because they did not timely perform acts described in section 7508(a)(1)—and issue refunds or abatements (including to spouses and dependents) of such amounts with extended limitation periods under section 6511.

This section establishes a Treasury Department program, by January 1, 2027, to refund or abate interest, penalties, and additions to tax paid by eligible individuals (or their spouses and dependents) for taxable years ending on or before the date of enactment, to the extent those amounts arose from acts under section 7508(a)(1) that were not timely performed during the period beginning January 1, 2021. The Secretary of State and the Attorney General, through the Hostage Recovery Fusion Cell, must compile and transmit a list of such individuals, after which the Treasury Secretary must provide notice of potential eligibility within 90 days of enactment or release and must extend the section 6511 refund limitation periods accordingly.

This section establishes a program, to be implemented by January 1, 2027, under which the Secretary of the Treasury (in consultation with the Secretary of State and the Attorney General) must identify eligible individuals through the Hostage Recovery Fusion Cell, provide notice of eligibility within 90 days of release or enactment, and refund or abate penalties, interest, and additions to tax paid for taxable years ending between January 1, 2021, and the date of enactment. It extends the period of limitations for such claims to one year after notice is provided.