A complete substitute amendment. v5, titled the "Taxpayer Assistance and Service Act," replaces v4's narrow focus on Tax Court improvements with a comprehensive bill addressing tax administration, customer service, judicial review, taxpayer advocate functions, tax return preparers, appeals, whistleblowers, hostages, and small businesses. The scope and content of v5 are fundamentally different from v4.
TAS Act
- Sponsor
- Rep. Moran, Nathaniel [R-TX-1]
- Committees
- Finance Committee (primary)
- Last action
- Sep 30, 2026
Bottom line
The bill comprehensively overhauls IRS operations and taxpayer rights, focusing on modernization, transparency, and enhanced avenues for dispute resolution and assistance.
What it actually does
This bill, titled the 'Taxpayer Assistance and Service Act,' aims to significantly modernize and improve the Internal Revenue Service's operations and taxpayer interactions. It mandates digitization of tax returns, establishes public dashboards for IRS performance metrics, expands online taxpayer accounts, and streamlines various administrative procedures. The bill also enhances judicial review options for taxpayers, strengthens the independence and authority of the National Taxpayer Advocate and the Office of Appeals, and introduces new regulations and penalties for tax return preparers. Additionally, it provides tax relief and deadline postponements for American citizens abroad and hostages, and includes provisions for small businesses and whistleblowers.
Proponents argue
Supporters argue that this bill is a crucial step towards a more efficient, transparent, and taxpayer-friendly IRS. They contend that the digitization efforts will reduce backlogs, the dashboards will increase accountability, and expanded online services will make tax compliance easier. Proponents also highlight the enhanced judicial review and stronger taxpayer advocate provisions as vital for protecting taxpayer rights and ensuring fair treatment, especially for vulnerable populations and those facing economic hardship.
Opponents contend
Critics may raise concerns about the significant administrative burden and cost associated with implementing such widespread changes, particularly the extensive IT modernization required. Some might argue that certain provisions, while well-intentioned, could inadvertently create new compliance complexities or empower the IRS in ways that could be misused, despite the bill's focus on taxpayer protections. Concerns could also be raised about the potential for increased litigation volume in the Tax Court due to expanded jurisdiction.
This is a lengthy and highly technical bill, requiring substantial time and expertise to fully comprehend its implications across various sections of the Internal Revenue Code. A casual reader would struggle to grasp its full scope within a short timeframe.
Sec. 101, Title I
Digitization of Tax Returns and Correspondence
This section mandates that the IRS accept and process all federal tax returns and amendments electronically. For paper returns and correspondence, the IRS must use optical character recognition (OCR) or similar technology to transcribe them. Exceptions apply if the technology is slower or less reliable than manual processing, but such exceptions require a report to Congress. This aims to reduce paper-based backlogs and improve processing efficiency.
Supporters argue
Supporters argue this will drastically reduce IRS backlogs, improve customer service by speeding up processing times, and bring the IRS into the 21st century by moving away from outdated paper-based systems.
Critics contend
Critics might express concern about the cost and technical challenges of implementing such a large-scale digitization project, and potential risks to data security during the transition.
Tradeoffs
The bill balances the need for modernizing IRS operations and improving efficiency with the significant financial and technical investment required, as well as potential data security risks during implementation.
Sec. 102, Title I
IRS Public Dashboard for Backlogs and Wait Times
This provision requires the IRS to establish a public website dashboard displaying real-time information on phone call volumes, wait times, callback availability, and monthly summaries of call statistics. It also mandates information on processing delays for various tax documents and requires technology to detect and screen out automated calls. This aims to increase transparency and provide taxpayers with better information about IRS service levels.
Sec. 105, Title I
Expansion of Online Accounts for Taxpayers and Preparers
By January 1, 2028, the IRS must provide a website or mobile application allowing taxpayers (including those abroad) to view their returns, documents, notices, and letters from the preceding six years. Taxpayers can also respond to IRS correspondence by uploading documents. Crucially, it allows authorized representatives, tax return preparers, or qualified reporting agents to access this information and transmit responses on behalf of taxpayers, with a program to investigate unauthorized disclosures.
Sec. 106, Title I
Automation of Refund Offset Bypass for Certain Individuals
This section amends Section 6402(a) of the Internal Revenue Code to require the IRS to refund overpayments, up to the amount of the Earned Income Tax Credit (EITC), to 'applicable taxpayers' who were classified as 'currently not collectible' (CNC) prior to requesting the refund. This means that for these vulnerable taxpayers, their EITC refund will not be automatically offset to pay other federal debts, unless specifically agreed upon or if the offer-in-compromise is in default.
Sec. 112, Title I
Modification of Procedural Requirements for Penalties and Disallowance Periods
This section amends Section 6751(b) to require that the decision to assess a penalty or impose a multi-year credit disallowance period must be personally approved in writing by the immediate supervisor or the IRS Office of Servicewide Penalties. This approval must be obtained before an 'appealable notice' (the first written notice offering appeal rights) is sent to the taxpayer. It also defines 'disallowance period' for certain credits (Child Tax Credit, American Opportunity Tax Credit, EITC) and clarifies that the supervisor approval is not needed for automatically calculated disallowance periods.
Sec. 204, Title II
Pre-Assessment Appeals of Foreign Information Return Penalties
This section clarifies the IRS's assessment authority for certain foreign information return penalties and establishes a new preliminary notice and right of review for these penalties. No 'covered penalty' (e.g., for failure to file forms related to foreign corporations, partnerships, or trusts) can be assessed without a written notice to the taxpayer, providing at least 60 days (120 days for those outside the U.S.) to request a review by the IRS Office of Appeals. Assessment and collection are suspended during this review period.
Sec. 306, Title III
De Novo Review of Innocent Spouse Relief by Tax Court
This section amends Section 6015(e)(7) to explicitly authorize the Tax Court and other federal courts to conduct a de novo (fresh, without deference to prior IRS findings) review of innocent spouse relief determinations. It also clarifies that the scope of review includes any remedy applicable in a suit for refund, collection, or bankruptcy. This expands the court's ability to re-examine all facts and legal issues related to innocent spouse claims.
Sec. 307, Title III
Clarification of Court Filing Deadlines as Nonjurisdictional
This section clarifies that deadlines for filing petitions with the Tax Court for innocent spouse relief, deficiency redeterminations, and collection due process appeals are 'nonjurisdictional claims-processing rules.' This means these deadlines are subject to waiver, forfeiture, estoppel, and equitable tolling, allowing the Tax Court to excuse late filings under certain circumstances. It also provides for abatement of assessments and suspension of collection activity if a late filing is excused.
Sec. 310, Title III
Authorization of Tax Court to Hear Suits for Refunds or Credits
This section grants the Tax Court concurrent jurisdiction with U.S. District Courts and the Court of Federal Claims to hear suits for refunds or credits, provided the amount in dispute does not exceed $2,000,000 per taxable year or event. This significantly expands the Tax Court's authority, traditionally limited to deficiency cases, to also resolve refund disputes. It includes provisions for staying proceedings if the IRS issues a notice of deficiency and for consolidating cases.
Sec. 401, Title IV
NTA Authorization to Direct Hire Attorneys
This section grants the National Taxpayer Advocate (NTA) direct hire authority to recruit and appoint qualified attorneys to report directly to the NTA or their delegate. These attorneys will not report to the Chief Counsel for the IRS and will not represent the Government in litigation. Their legal interpretations will not be binding on the Secretary of the Treasury, but the Chief Counsel will continue to advise the NTA's office.
Sec. 504, Title V
Authority to Deny, Revoke, or Suspend Preparer Tax Identification Numbers (PTINs)
This section establishes a comprehensive program for administering PTINs, requiring preparers (unless they are specified practitioners like CPAs or attorneys) to meet suitability and education requirements. The IRS gains authority to deny, suspend, or revoke PTINs for reasons including failure to meet requirements, incompetence, disreputable conduct (e.g., unpaid tax delinquency, criminal offenses, certain penalties), or violations of Treasury regulations. It also allows for monetary penalties up to $5,000 and preliminary suspensions, with appeal procedures and public disclosure of final determinations.
Sec. 603, Title VI
Responses to Claims for Refund Required; Appeal of Claims for Refund Authorized
This section mandates that the IRS review refund claims and make a determination within an 'applicable date' (generally 12 months). If a claim is disallowed, the IRS must provide a detailed written explanation and instructions for appealing to the Independent Office of Appeals. Failure to make a timely determination results in a 1 percentage point increase in the overpayment interest rate (up to $500). Taxpayers can appeal disallowances within 30 days (90 days for those abroad), and the 2-year period for filing a refund suit is suspended during the appeal.
Sec. 701, Title VII
De Novo Review of Whistleblower Award Determinations
This section amends Section 7623(b)(4) to specify that any review by the Tax Court of IRS whistleblower award determinations shall be 'de novo.' This means the Tax Court will conduct a fresh review of the case, without deference to the IRS's prior findings, and can consider the administrative record as well as any additional newly discovered or previously unavailable evidence. This significantly expands the scope of judicial review for whistleblowers.
Sec. 801, Title VIII
Postponement of Tax Deadlines for Hostages and Wrongfully Detained Individuals Abroad
This section inserts a new Section 7511 into the Internal Revenue Code, which postpones tax deadlines for U.S. nationals unlawfully or wrongfully detained abroad, or held hostage abroad. The period of detention is disregarded for determining tax deadlines, interest, penalties, and credits/refunds. This benefit also applies to their spouses. The Secretaries of State and Attorney General are required to provide lists of such individuals to the Treasury for identification.
Sec. 901, Title IX
Voluntary Withholding Agreements for Payments to Independent Contractors
This section amends Section 3402(p) to allow for voluntary withholding agreements between persons making and receiving 'applicable non-wage remuneration' (payments to independent contractors). If such an agreement is in effect, the payment will be treated as wages for withholding purposes. The Secretary of the Treasury is directed to issue regulations and guidance to implement this, including determining the amount to be withheld and the types of payments covered.
Sec. 902, Title IX
Extension of Mailbox Rule to Electronic Submissions and Payments
This section extends the 'mailbox rule' to electronic submissions and payments. If a document or payment is authorized to be filed or made electronically on or before the due date, and is received (or accounted for, for payments) no later than 3 business days after the due date, it will be deemed filed or made on the date it was authorized to be submitted electronically. An exception applies if the taxpayer used a system designed to delay fund transfers for economic benefit.
Sec. 905, Title IX
Business Child Care Liaison
This section mandates the Commissioner of Internal Revenue to appoint a Business Child Care Liaison within the IRS. This liaison will act as a bridge between the IRS, businesses, and various stakeholders to promote employer-provided child care benefits. Duties include public education, facilitating communication about operational challenges, issuing fact sheets for preparers, recommending legislative changes, and coordinating with other federal agencies. The liaison will also submit annual reports to Congress on their activities and the utilization of child care tax benefits.
Sec. 1006, Title X
Modifications to Penalties for Unauthorized Disclosures of Taxpayer Information
This section significantly increases criminal penalties for unauthorized disclosures of taxpayer information, raising fines from $5,000 to $250,000 and imprisonment from 5 to 7 years. It also creates a new felony offense (Sec. 7213B) for IRS contractors who willfully fail to maintain safeguards, resulting in unauthorized disclosure, with fines up to $500,000 or 25% of the contract amount. Civil damages for unauthorized disclosures are also increased from $1,000 to $5,000.
Automates the bypass of refund offsets for the Earned Income Tax Credit (EITC) portion of an overpayment for taxpayers classified as 'currently not collectible' (CNC). This means their EITC will be refunded directly rather than being used to pay other federal debts.
Sec. 106(a), Title I, amending Section 6402(a)
Why it matters:This is standard legislative practice for amending existing code sections. The technical nature of tax law often requires precise amendments to specific subsections, which can make them less visible to a general audience.
Case for: Supporters argue this provides crucial, immediate financial relief to some of the most vulnerable taxpayers, ensuring they receive the full benefit of the EITC when they are already facing severe economic hardship.
Case against: Critics might argue that this could reduce the government's ability to collect other outstanding federal debts from these individuals, potentially shifting the burden or delaying collection for other agencies.
Estimated impact: Potentially millions of dollars in EITC refunds directly to low-income individuals, impacting federal debt collection efforts.
Reclassifies deadlines for filing petitions with the Tax Court (for innocent spouse relief, deficiency redeterminations, and collection due process appeals) as 'nonjurisdictional claims-processing rules.' This allows the Tax Court to apply equitable principles like waiver, forfeiture, estoppel, and equitable tolling to excuse late filings.
Sec. 307(a), Title III, amending Section 7451
Why it matters:This is a technical legal change to judicial procedure, which is inherently complex. The precise wording is necessary to achieve the intended legal effect within the existing framework of administrative law.
Case for: Supporters argue this prevents unjust outcomes where taxpayers with legitimate claims are denied a hearing solely due to a missed deadline, especially when the delay is excusable. It prioritizes substantive justice over procedural rigidity.
Case against: Some might argue that this introduces uncertainty into the finality of tax assessments and could encourage more litigation by providing avenues to challenge deadlines, potentially increasing the Tax Court's administrative burden.
Estimated impact: Could affect a significant number of taxpayers annually who miss filing deadlines, potentially allowing more cases to be heard on their merits rather than being dismissed procedurally.
Clarifies that the unlimited period for assessment in cases of false or fraudulent returns applies only if the fraud is committed 'by the taxpayer.' It further specifies that for joint returns, fraud by either spouse is considered fraud by the taxpayer, applying to both spouses.
Sec. 1003, Title X, amending Section 6501(c)(1)
Why it matters:This is a precise legal clarification within the complex framework of tax statutes of limitations. The language is necessarily technical to integrate correctly with existing law.
Case for: Supporters argue this protects innocent taxpayers from having an unlimited assessment period applied to them solely because their preparer committed fraud without their knowledge or intent, aligning the law more closely with principles of personal culpability.
Case against: Some might argue that this could make it harder for the IRS to pursue cases where a preparer's fraud is extensive but the taxpayer's direct intent is difficult to prove, potentially limiting the IRS's ability to recover lost revenue.
Estimated impact: Could protect taxpayers who are victims of preparer fraud from indefinite assessment periods, potentially reducing the number of cases where the IRS can pursue tax liabilities beyond the standard three-year limit.