TAS Act

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.