Taxpayer Due Process Enhancement Act
Officially: “Taxpayer Due Process Enhancement Act” Read the full text
What it does
Read it in plain language
1Short title
This section would let the Act be referred to as the 'Taxpayer Due Process Enhancement Act.'
Show official text
1. Short title This Act may be cited as the Taxpayer Due Process Enhancement Act .
2Suspension of period of limitations on filing a claim for credit or refund during collection action proceedings
Under current law, section 6330(e)(1) of the tax code pauses the deadline for IRS collection action under section 6502 while a hearing requested under section 6330 is pending. This section would add the deadline for filing a claim for a tax credit or refund under section 6511(a), (b), or (c) to that same pause, so the refund-claim deadline would also stop running during that period. That pause on the refund-claim deadline would apply only to the extent the credit or refund relates to a tax liability the taxpayer properly disputed at the hearing. The pause would end on any date when a missed deadline, a court filing, or a court order shows the taxpayer has forfeited or otherwise lost the right to keep pursuing that dispute. This section would also add a cross-reference in section 6511(i) pointing to the new rule in section 6330(e). These changes would apply to any limitations period that, ignoring this section's changes, would otherwise end on or after the date this Act becomes law.
Show official text
2. Suspension of period of limitations on filing a claim for credit or refund during collection action proceedings (a) In general Section 6330(e)(1) of the Internal Revenue Code of 1986 is amended by inserting subsection (a), (b), or (c) of section 6511 (relating to limitations on credit or refund), after section 6502 (relating to collection after assessment), . (b) Period of limitations on filing a claim for credit or refund Section 6330(e) of such Code is amended by adding at the end the following new paragraph: (3) Period of limitations on filing a claim for credit or refund In the case of the running of any period of limitations under subsection (a), (b), or (c) of section 6511 with respect to the filing of any claim for credit or refund, paragraph (1)— (A) shall apply only to the extent that such credit or refund relates to an underlying tax liability properly disputed at the hearing requested under this section, and (B) shall not result in a suspension of the running of such period of limitations after any date on which a lapse of a deadline, a court filing, or a court order establishes that the taxpayer has forfeited or otherwise lost the right to pursue such dispute. . (c) Cross reference Section 6511(i) of such Code is amended by adding at the end the following new paragraph: (8) For limitations in case of collection action proceedings, see section 6330(e). . (d) Effective date The amendments made by this section shall apply to the running of any period of limitations if such period (determined without regard to the amendments made by this section) ends on or after the date of the enactment of this Act.
3Prohibition on crediting of overpayments against disputed tax liability during collection action proceedings
If a taxpayer properly requests a hearing under section 6320(a)(3)(B) or section 6330(a)(3)(B), and properly disputes the underlying tax liability at that hearing, this section would bar the IRS from crediting the taxpayer's overpayments against that disputed liability during the period when the refund-claim deadline for that liability is paused under the new section 6330(e) rule, unless the taxpayer consents to the credit. This section would also broaden the list of issues a taxpayer may raise at a hearing under section 6330(c)(2)(A) from issues relating to 'the unpaid tax or the proposed levy' to issues relating to 'the unpaid tax, collection action, or proposed collection action,' so the same hearing rules would apply to lien cases as well as levy cases. The bar on crediting overpayments would apply to any such period any part of which falls after the date this Act becomes law. The broadened hearing-issues rule would take effect on the date this Act becomes law.
Show official text
3. Prohibition on crediting of overpayments against disputed tax liability during collection action proceedings (a) In general Section 6402 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection: (o) Prohibition on crediting of overpayments against disputed tax liability during collection action proceedings If a hearing is properly requested under section 6320(a)(3)(B) or 6330(a)(3)(B), and an underlying tax liability referred to in section 6330(c)(2)(B) is properly disputed at such hearing, such tax liability shall not, except with the consent of the taxpayer, be taken into account under subsection (a) for the period during which the period of limitations for filing a claim for credit or refund relating to such tax liability is suspended by reason of section 6330(e). . (b) Clarification of application of certain levy hearing rules to lien hearings Section 6330(c)(2)(A) of such Code is amended by striking unpaid tax or the proposed levy and inserting unpaid tax, collection action, or proposed collection action . (c) Effective dates (1) In general The amendment made by subsection (a) shall apply with respect to any period described in section 6402(o) of the Internal Revenue Code of 1986 (as added by this section) if any portion of such period is after the date of the enactment of this Act. (2) Clarification of application of certain levy hearing rules to lien hearings The amendment made by subsection (b) shall take effect on the date of the enactment of this Act.
4Expansion of jurisdiction of Tax Court
This section would rewrite section 6330(d)(1) of the tax code to say that a person may, within 30 days of a determination under section 6330, petition the Tax Court to review the determination and any underlying tax liability that the person properly disputed at the hearing. Once the petition is filed, the Tax Court would have jurisdiction over the determination itself, the underlying tax liability, and any equitable tolling of the 30-day filing deadline. The Tax Court would keep this jurisdiction even if the IRS abandons the collection action or proposed collection action that was at issue in the determination. These changes would apply to petitions filed after the date this Act becomes law.
Show official text
4. Expansion of jurisdiction of Tax Court (a) In general Section 6330(d)(1) of the Internal Revenue Code of 1986 is amended to read as follows: (1) Petition for review by Tax Court (A) In general In the case of a determination under this section, the person may, within 30 days of such determination, petition the Tax Court for review of— (i) such determination, and (ii) any underlying tax liability referred to in subsection (c)(2)(B) which is properly disputed at the hearing in which such determination is made. (B) Jurisdiction of Tax Court Upon the filing of a petition, the Tax Court shall have jurisdiction with respect to— (i) the determination referred to in subparagraph (A)(i), (ii) any underlying tax liability referred to in subparagraph (A)(ii), and (iii) any equitable tolling of the 30-day deadline referred to in subparagraph (A). (C) Retention of jurisdiction Upon a determination being made under this section, subparagraphs (A) and (B) shall apply whether or not the Secretary abandons the collection action or proposed collection action at issue in such determination. . (b) Effective date The amendment made by this subsection shall apply with respect to petitions filed after the date of the enactment of this Act.
Where it is
In the House.