Protecting Innocent Taxpayers from Endless Assessments Act
- Sponsor
- Sen. Marshall, Roger [R-KS]
- Committees
- Finance Committee (primary)
- Last action
- Jul 14, 2026
Bottom line
The bill clarifies that the IRS cannot indefinitely pursue tax assessments for fraud if the fraudulent intent was solely on the part of a tax preparer, not the taxpayer.
What it actually does
This bill amends the Internal Revenue Code of 1986 to specify that the exception to the general three-year statute of limitations for tax assessments, which applies in cases of fraudulent returns, is only triggered when the fraudulent intent originates 'by the taxpayer' themselves. This change aims to protect taxpayers who are victims of fraud committed by a tax preparer or other third party without their knowledge or intent to evade tax.
Proponents argue
Supporters argue that this bill provides crucial protection for innocent taxpayers who may be unknowingly victimized by unscrupulous tax preparers. They contend it prevents the IRS from holding taxpayers indefinitely liable for fraud they did not commit or intend, ensuring fairness and due process in tax enforcement.
Opponents contend
Critics might argue that this amendment could create a loophole, making it more difficult for the IRS to pursue cases where fraud has occurred and the taxpayer has benefited, even if direct intent by the taxpayer is hard to prove. They may contend it could inadvertently incentivize taxpayers to claim ignorance of preparer fraud, potentially reducing overall tax compliance and revenue collection.
The bill is very short and clear, making it highly accessible for a reader to understand its core purpose and implications within a short timeframe.
Section 2(a)
Limitation Period Not Extended for Victims of Preparer Fraud
This provision modifies Section 6501(c)(1) of the Internal Revenue Code, which states that there is no statute of limitations for assessing tax if a return is 'false or fraudulent with the intent to evade tax.' The bill adds the phrase 'by the taxpayer' after 'intent,' meaning this indefinite assessment period will only apply if the fraudulent intent originated with the taxpayer themselves, not solely with a third-party preparer.
Supporters argue
Supporters argue this provision is essential for taxpayer protection, ensuring that individuals are not held perpetually accountable for the criminal actions of others. It clarifies existing law to prevent overreach by tax authorities and uphold principles of fairness.
Critics contend
Opponents might argue that this clarification could inadvertently shield some taxpayers who, while not directly initiating fraud, may have been willfully ignorant or benefited from a preparer's fraudulent actions. They may contend it could complicate IRS investigations and potentially allow some fraudulent activity to go unpunished.
Tradeoffs
The provision balances the need to protect innocent taxpayers from third-party fraud against the government's interest in robust tax enforcement and preventing tax evasion. It creates a tension between ensuring due process for individuals and maintaining the integrity of the tax system.