S. 5441 — TAS Act

This section requires the Internal Revenue Service to accept and electronically process any Federal tax return or amendment filed electronically. It also directs the IRS to use optical character recognition technology to transcribe paper returns and correspondence, except when the Secretary determines the technology is slower or less reliable than manual transcription and reports that determination to the House Ways and Means and Senate Finance Committees within 30 days. The requirements apply to individual income tax returns received on or after January 1 of the first calendar year beginning more than 180 days after enactment, to estate and gift tax returns received on or after January 1 of the first calendar year beginning more than 24 months after enactment, and to all other returns and correspondence received on or after January 1 of the first calendar year beginning more than 18 months after enactment.

This section requires the Internal Revenue Service to publish real-time data on its public website for each applicable phone number extension, including the number of callers waiting or connected, longest wait times, callback availability, an embedded wait-time estimator, and an application programming interface. It also mandates monthly summaries of prior-month call metrics, technology to screen automated calls, and disclosure of the earliest receipt dates for items processed during any week with a significant delay (defined as failure to process items received at least 21 days earlier). The requirements take effect 12 months after enactment.

This section requires the Secretary to provide taxpayers, through a website and mobile application, individualized and up-to-date information on the status of their tax returns and amended returns. The information must cover whether the IRS has received and entered the return, completed processing (including refund issuance date, expected receipt date, and account or mailing details), or suspended processing (including the reason and any requested information with submission deadlines), by January 1 of the first calendar year beginning more than 12 months after enactment.

This section expresses the sense of Congress that taxpayers contacting the Internal Revenue Service should have the option to receive a callback, and directs the agency to provide that option by calendar year 2028 for any unanswered call to an applicable phone number extension within 5 minutes, including for taxpayers residing outside the United States.

This section requires the Secretary of the Treasury to make available, by January 1 of the first calendar year beginning more than 18 months after enactment, a website or mobile application allowing any taxpayer to view returns, documents, notices, and letters from the preceding six years (but not before enactment), respond to IRS communications, and authorize access by representatives, tax return preparers, or qualified reporting agents. It also requires a program to investigate and publicly report on unauthorized disclosures of return information and pre-launch focus groups with taxpayers and tax professionals.

This section requires the Secretary to refund overpayments up to the amount of the earned income tax credit under section 32 to applicable taxpayers classified as currently not collectible before the refund request date, rather than crediting such amounts against tax liabilities. The change applies to offsets made after the date that is 12 months after enactment.

This section waives fees for installment agreements under section 6159 for taxpayers whose adjusted gross income does not exceed 250 percent of the applicable poverty level. The waiver applies to agreements entered into more than 12 months after the date of enactment.

This section establishes a program, within 12 months of enactment, for the Internal Revenue Service to identify taxpayers reasonably likely to be experiencing economic hardship with unpaid tax liabilities, based on recent income and asset data. It requires the Secretary to provide such taxpayers who request installment agreements with information on alternatives including partial collection agreements, offers-in-compromise, and currently not collectible status, and to report to the House Ways and Means and Senate Finance Committees within two years on identification accuracy, numbers of affected taxpayers, and options provided.

This section requires quarterly notices (from annually) to taxpayers with tax delinquent accounts, including estimates of penalties and interest that may accrue and information on assistance programs. It exempts periods when an installment agreement or accepted offer-in-compromise is in effect and cases where the tax is determined uncollectible. The changes take effect 24 months after enactment.

This section eliminates the $6,000,000 annual aggregate cap and the $100,000 per-clinic cap on grants for qualified low-income taxpayer clinics. It requires clinics to provide matching funds equal to 100 percent of the grant (which the Secretary may reduce to as low as 25 percent if doing so would expand coverage to additional taxpayers), allowing salaries and equipment costs but excluding indirect expenses, effective for calendar years beginning after enactment.

This section limits the requirement for a General Counsel opinion on an IRS offer-in-compromise to cases the Secretary determines present a significant legal issue. It applies to offers submitted or pending on or after the date of enactment.

This section requires personal written approval by an IRS supervisor or the Office of Servicewide Penalties before any penalty is assessed or any disallowance period takes effect for the child tax credit under section 24, education credits under section 25A, or earned income tax credit under section 32, and before the first appealable notice is sent to the taxpayer. It mandates annual public reports, beginning 24 months after enactment, detailing penalties assessed by every IRS organizational unit and their progression through determination, assessment, and review. The changes apply to notices sent after 12 months following enactment.

This section requires the IRS to return to the taxpayer any amounts collected in excess of the remaining payments due under an accepted offer-in-compromise, unless the taxpayer agrees otherwise or the Secretary determines the compromise is in default and terminates it. It also authorizes release of any levy imposed on the liability subject to the accepted offer.

This section extends the period for returning money wrongfully levied upon or received from the sale of property under section 6343(b) to 2 years from the date the Secretary receives the amount (from the date of the levy). The change applies to amounts levied upon or received after the date that is 12 months after enactment.

This section requires the Secretary to report to the House Ways and Means and Senate Finance Committees within 2 years on IRS actions to implement the title, including successes, challenges, and recommendations. It also directs annual reports beginning within 12 months on IRS efforts to identify, prevent, and resolve tax fraud, including Security Summit interactions, data on fraudulent refund claims by form and filing method, and amounts disbursed or disallowed. It further requires annual reports for 5 years on IRS systems for tracking taxpayer and congressional documents to reduce duplicative requests. It clarifies that submission of the report under section 7803(c)(2)(B) does not satisfy the complexity analysis requirement under section 4022 of the IRS Restructuring and Reform Act of 1998.

This section directs the Secretary to study combining and simplifying reporting required under section 5314 of title 31 and sections 6038, 6038A, 6038B, 6038C, 6038D, 6039F, 6046A, and 6048 of the Internal Revenue Code of 1986, while eliminating duplicative information requests from nonresident United States taxpayers, with input from the National Taxpayer Advocate. It requires submission of a report with findings, actions taken, and legislative recommendations to Congress within 180 days of enactment.

This section directs the Comptroller General to study compliance burdens under Federal tax laws for United States persons living abroad, including low- and moderate-income individuals, with respect to filing returns and reports, foreign retirement plans, currency gains, IRS and FinCEN inquiries, access to financial services, and tax preparation. The Comptroller General must submit a public report to the Secretary of the Treasury and Congress within 1 year of enactment, after which the Secretary must report within 1 year on actions taken and any needed legislation.

This section extends the period for requesting abatement of assessments arising from mathematical or clerical errors to 120 days (from 60 days) when the notice is addressed to a person outside the United States. The change applies to notices sent after the date that is 180 days after enactment.

This section treats all penalties under the Internal Revenue Code as taxes for assessment and collection purposes, except those for which civil or criminal actions are prescribed or have been consistently treated as such by the Secretary. It requires the IRS to provide at least 60 days’ written notice (120 days for taxpayers abroad) of proposed covered penalties under sections 6038(b)(1), 6038A(d)(1), 6038B(c), 6038C(c), 6038D(d)(1), 6039F(c)(1)(B), or 6677, and grants taxpayers the right to review by the Independent Office of Appeals before assessment or collection.

This section repeals the due date requirements for information returns relating to foreign gifts and trusts. The repeal applies to returns for taxable years beginning after December 31, 2026.

This section expands the Tax Court’s authority to issue subpoenas before hearings for discovery or evidentiary purposes. It permits any judge or special trial judge to examine parties as well as witnesses, to compel production of electronically stored information and tangible things, and to administer oaths or affirmations, with issuance, service, and enforcement governed by Tax Court rules.

This section authorizes the Tax Court to correct clerical mistakes, oversights, or omissions in judgments, orders, or records on its own or by motion, with appellate court leave required once an appeal is docketed. It also permits the Tax Court to relieve a party from a final judgment or order on grounds including mistake, newly discovered evidence, fraud, void judgment, or other circumstances where justice requires, provided a motion is filed within a reasonable time and no later than 1 year after entry for the first three grounds; such motions do not affect finality while pending, and either party may appeal the grant of relief within 90 days.

This section expands the authority of special trial judges of the Tax Court to hear any proceeding not otherwise assigned, upon the consent of the parties and pursuant to Tax Court rules. It authorizes such judges to decide those cases and grants them independent contempt authority, limited to Class C misdemeanor penalties. The changes take effect when the Tax Court adopts implementing rules.

This section applies the disqualification standards for federal judges under section 455 of title 28, United States Code, to judges, special trial judges, and proceedings of the Tax Court.

This section requires notices of deficiency for denials of the child tax credit, American Opportunity Tax Credit, or earned income tax credit to state the grounds for denial, the effect of any multi-year disallowance period, and the information needed to claim the credit in future years. It grants the Tax Court jurisdiction to review the imposition and length of such disallowance periods, places the burden of production on the IRS, and changes the trigger for a disallowance period from a final determination to the mailing of a notice of deficiency. These amendments apply to notices mailed on or after the date that is 36 months after enactment.

This section authorizes de novo review by the Tax Court and other courts of innocent spouse relief determinations under section 6015. It expands available remedies to include any relief applicable in a suit for refund or collection or in a bankruptcy case. The changes apply to petitions, requests, and suits filed or pending on or after the date of enactment.

This section classifies deadlines for filing Tax Court petitions under sections 6015(e)(1)(A), 6213(a), and 6330(d)(1)(A) as nonjurisdictional claims-processing rules subject to waiver, forfeiture, estoppel, and equitable tolling. It requires the Secretary to abate related assessments, suspend levies and collection proceedings, and refund amounts collected when the Tax Court excuses an untimely filing under those doctrines, and it extends related limitation periods by the number of days between the original deadline and the court’s determination.

This section clarifies that taxpayers may raise challenges to the amount or existence of their underlying tax liability during collection due process hearings in the Tax Court or other federal courts, provided they did not otherwise have an opportunity to dispute the liability (other than through refund suits under sections 7442 or 1346(a)(1) of title 28). It also limits preclusion rules in such hearings to issues unrelated to the underlying tax liability.

This section authorizes the Tax Court to determine and enforce overpayments of tax in collection due process cases under section 6330, subject to limits requiring that the overpaid amounts were paid after the CDP notice or within the periods under section 6511. It suspends the limitations period for credits or refunds during proceedings, prohibits crediting overpayments against disputed liabilities without taxpayer consent, extends parallel rules to lien hearings under section 6320, and applies to cases pending on or after the date of enactment.

This section grants the Tax Court jurisdiction over refund suits for internal revenue taxes, penalties, or other amounts collected, up to $2 million per taxable year (subtitle A), calendar year (chapter 12), taxable period (subtitles C, D, or E), or other amount, to the same extent as district courts, subject to section 7422. It extends small tax case procedures to such petitions seeking no more than $50,000, adjusts concurrent jurisdiction rules for district courts and the Court of Federal Claims, and applies to actions filed after 12 months following enactment.

This section authorizes the district courts, Court of Federal Claims, and Tax Court to hear refund actions from taxpayers who have an installment agreement under section 6159 or are in currently not collectible status, without requiring full payment of the disputed liability. It applies to actions filed on or after the date that is 12 months after enactment and permits dismissal with leave to refile if the taxpayer falls out of compliance.

This section increases to $100,000 (from $50,000) the threshold amount of taxes in dispute that qualifies a Tax Court proceeding for small case procedures, applies the same threshold to employment status disputes under section 7436, and indexes the threshold for inflation after 2026.

This section authorizes the National Taxpayer Advocate to appoint counsel in the Office of the Taxpayer Advocate who report directly to the Advocate or a delegate. The National Taxpayer Advocate may use direct-hire authority to recruit such counsel without regard to preference requirements; the counsel shall not report to the IRS Chief Counsel, shall not represent the Government in litigation, and their legal interpretations shall not bind the Secretary.

This section expands the National Taxpayer Advocate’s authority to make personnel decisions to cover any officer or employee of the Office of the Taxpayer Advocate, rather than only employees of local taxpayer advocate offices. The change takes effect 12 months after enactment.

This section requires the Commissioner of Internal Revenue to provide the Office of the Taxpayer Advocate, within 2 weeks of a written request, access to returns and return information, legal advice from the Office of Chief Counsel (including advice prepared in contemplation of litigation), and meetings with taxpayers for any open and pending taxpayer assistance case, as well as documents, data, and legal advice needed for required reports. It also requires the National Taxpayer Advocate’s annual reports to identify any failures to meet these deadlines.

This section repeals the suspension of the period of limitations on assessment, collection, refund, or credit of tax while a taxpayer's application for a Taxpayer Assistance Order is pending before the National Taxpayer Advocate. The repeal takes effect on the date of enactment.

This section authorizes the Commissioner of Internal Revenue and the Office of the Taxpayer Advocate to incur obligations in advance of appropriations during any lapse in appropriations to assist taxpayers experiencing economic hardship from IRS actions or inactions and to comply with Taxpayer Assistance Orders.

This section expands the definition of "return" for purposes of tax return preparer penalties under sections 6694, 6695, and 6695A to include any document purporting to be a return of tax, an administrative adjustment request under section 6227, or a partnership adjustment tracking report under section 6226(b)(4)(A). The change takes effect on the date of enactment.

This section increases the penalty on tax return preparers for failing to furnish a valid identifying number that complies with section 6109(a)(4)(A) to $250 (from $50) per failure, with an annual maximum of $75,000 (from $25,000), and deems an identifying number non-compliant if it is assigned to another person, does not exist, is inactive or expired, has been withdrawn, suspended, or revoked, or is otherwise invalid. It imposes a new penalty of $250 on electronic return originators for each failure to use a valid electronic filing identification number assigned by the Secretary and validated in real time under a new program that the Secretary must establish within 24 months of enactment.

This section increases penalties for tax return preparers under section 6695. It raises the per-failure penalty in subsections (a), (b), (d), and (e) to $250 (from $50) and the annual or period maximums to $50,000 or $75,000 (from $25,000). It doubles the penalty in subsection (g) to $1,000 (from $500). It adjusts inflation indexing in subsection (i) to apply after 2024 (from after 2013). It also imposes a new penalty for misappropriation equal to the greater of $1,000 or the full amount of any taxpayer refund payment taken by the preparer, with an exception for bank deposits to the taxpayer’s account.

This section establishes a program under which the Secretary may deny, revoke, or suspend a preparer tax identification number unless the individual demonstrates suitability through a background check and personal tax compliance, completes up to 18 hours of annual education on ethics and tax law, satisfies state program requirements, or qualifies as a specified practitioner (certified public accountant, attorney, or enrolled agent in good standing with the Treasury Department and state licensing authorities). It requires notice and a 30-day cure period for education failures and grandfathers prior background checks.

This section authorizes the Chief of Appeals to appoint counsel for the Internal Revenue Service Independent Office of Appeals. Such counsel report directly to the Chief of Appeals, do not report to the Chief Counsel for the Internal Revenue Service, do not represent the government in litigation, and issue legal interpretations that are not binding on the Secretary.

This section authorizes the Secretary of the Treasury to use direct hire authority to recruit and appoint qualified applicants who are not Internal Revenue Service enforcement employees to positions in the Independent Office of Appeals, without regard to notice or preference requirements.

This section requires the Secretary of the Treasury to review any claim for refund, make a determination within 12 months of receipt (or an agreed later date), and mail a detailed written explanation of any disallowance to the taxpayer’s last known address, including appeal instructions to the IRS Independent Office of Appeals. It increases the overpayment interest rate by 1 percentage point for missed deadlines (capped at $500, adjusted for inflation after 2026), allows appeals within 30 days (90 days if mailed abroad), suspends the 2-year period for filing suit during appeals, permits deemed disallowance elections, and exempts frivolous claims. The requirements apply to claims received after 12 months following enactment.

This section provides for independent administrative review of any determination that an offer-in-compromise is nonprocessable before such determination is communicated to the taxpayer, and of any rejection of a proposed offer-in-compromise or installment agreement under section 7122 or 6159 before such rejection is communicated to the taxpayer.

This section requires the Internal Revenue Service Independent Office of Appeals to evaluate all hazards of litigation without exception in every case. It makes the appeals resolution process available to all taxpayers for disputes over tax liability, penalties, collection alternatives such as installment agreements, tax-exempt status determinations, and related discretionary decisions under subtitles A, B, or C, subject to exceptions for constitutional claims without final court precedent, frivolous positions, closing agreements, pending criminal investigations, and issues designated for litigation by Chief Counsel. It authorizes the Tax Court to direct referral to the Office when appropriate.

This section modifies the Tax Court’s review of whistleblower award determinations under section 7623(b) to de novo review based on the administrative record at the time of the original determination and any newly discovered or previously unavailable evidence. It applies to petitions pending on, or filed on or after, the date of enactment.

This section exempts awards authorized under section 7623 of the Internal Revenue Code of 1986 from reduction under any sequestration order issued under the Balanced Budget and Emergency Deficit Control Act of 1985 after the date of enactment.

This section requires whistleblowers to proceed anonymously before the Tax Court in all proceedings under section 7623, unless the court finds that a societal interest in disclosure exceeds the potential harm to the whistleblower. The requirement applies to petitions pending on, or filed on or after, the date of enactment.

This section requires the annual IRS whistleblower report to include a list and descriptions of the top 10 tax avoidance schemes disclosed by whistleblowers during the year. The requirement applies to reports for fiscal years ending after enactment of this Act.

This section requires the Secretary to include interest at the overpayment rate under section 6621(a) in any whistleblower award under section 7623(b) if notice of a preliminary award recommendation is not provided within 12 months after all proceeds are collected and tax liabilities are finalized. The requirement takes effect 180 days after enactment, with a transitional rule resetting the 12-month period for cases already past that point.

This section expands the above-the-line deduction under section 62(a)(21) for attorney's fees paid in connection with whistleblower awards under section 7623 of the Internal Revenue Code. The change applies to taxable years ending after the date of enactment.

This section postpones tax filing deadlines, interest accrual, penalties, and refund determinations for US nationals unlawfully or wrongfully detained abroad or held hostage abroad, and for their spouses, during the period of detention. It requires the Secretary of State and the Attorney General to provide annual identification lists to the Treasury Department beginning January 1, 2027, directs updates to Treasury databases, and mandates abatement and refund of penalties assessed before identification. The changes apply to taxable years ending after the date of enactment.

This section establishes a program, by January 1, 2027, under which the Secretary (in consultation with the Secretary of State and the Attorney General) refunds or abates penalties, interest, and additional taxes paid by eligible individuals held hostage or unlawfully detained abroad (or their spouses and dependents) for tax years ending on or before the date of enactment, for failures to act during the period beginning January 1, 2021. It directs the Hostage Recovery Fusion Cell to compile and transmit a list of such individuals and requires notice within 90 days of enactment or release, with a one-year extension of the period to claim refunds.

This section authorizes voluntary withholding agreements between payers and recipients of non-wage payments for services performed by an individual. Under such an agreement, the payments are treated as wages subject to withholding under section 3402. The Secretary must issue regulations or guidance on the amounts to be withheld and the types of payments covered no later than 18 months after enactment.

This section extends the mailbox rule to electronic tax filings and payments. It deems the date a taxpayer authorizes electronic submission of a permitted document or payment as the filing or payment date, if the submission is received no later than 3 business days after the due date. The rule does not apply to payments using systems designed principally to delay Treasury transfers for economic benefit. It requires Treasury regulations within 1 year of enactment and applies to submissions on or after that date.

This section revises IRS notice requirements before contacting third parties about a taxpayer’s liability. Notices must now identify the specific item of information sought from third parties when the taxpayer could reasonably provide it, and must give the taxpayer at least 45 days (or more upon request with reasonable cause) to respond before contacts occur. It creates a good cause exception to these requirements if compliance would likely lead to concealment or destruction of records, intimidation of witnesses, or attempts to flee. The changes apply to notices issued more than 12 months after enactment.

This section extends the deadline for farmers and fishermen to pay estimated taxes to April 15 (from March 1). The change applies to taxable years beginning after the date of enactment.

This section establishes a Business Child Care Liaison within the Internal Revenue Service, appointed by the Commissioner without regard to competitive service rules and compensated at Executive Schedule level V. The liaison coordinates with businesses, states, tribes, and other agencies on employer-provided child care benefits; issues fact sheets for tax preparers; creates SAM.gov resources on dependent care assistance programs, Dependent Care Flexible Spending Accounts, and the section 45F credit; recommends policy changes; and submits annual reports to the Senate Finance and House Ways and Means Committees detailing assistance requests, activities, and utilization data by employer size.

This section authorizes redisclosure of return information received under section 6103(l)(13) to officers and employees of the Congressional Budget Office for purposes related to education loans. It requires the Secretary of Education to submit annual reports to the Secretary of the Treasury on the number of such redisclosures and any unauthorized use, access, or disclosure.

This section requires partnerships with more than 50 partners or assets valued at $1 million or more to file returns on magnetic media, notwithstanding the general threshold based on the number of returns filed. The requirement applies to returns filed on or after January 1 of the first calendar year beginning after the date of enactment.

This section limits the unlimited assessment period for false or fraudulent returns to cases where the taxpayer intended to evade tax. It treats intent by either spouse on a joint return as intent by the taxpayer. The changes apply to assessments made or proceedings begun after the date of enactment.

This section makes a technical correction to the subsection numbering of section 7508A of the Internal Revenue Code regarding IRS authority to extend tax deadlines in disaster situations, effective as if included in the Disaster Related Extension of Deadlines Act.

This section requires electronically filed information returns under sections 6041 (other than nonemployee compensation), 6042, 6047(d), 6049, 6050F, and 6050W to be filed by January 31 (from March 31) of the following year. It also requires reports of IRA distributions to be filed by January 31. The changes apply to returns relating to calendar years after December 31, 2027.

This section increases criminal penalties for unauthorized disclosure of returns or return information to a fine of $250,000 or imprisonment of up to 7 years (from $5,000 or 5 years). It establishes a new felony for IRS contractors who willfully fail to protect confidentiality resulting in unauthorized disclosure, punishable by a fine of the greater of $500,000 or 25 percent of the contract value. It increases civil damages for such violations to $5,000 (from $1,000) per violation, and applies these changes to disclosures or inspections after the date of enactment.