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119-s-2358119th CongressWALLET

IRS Accountability and Taxpayer Protection Act

Sponsored By: Senator Scott, Tim [R-SC]

Introduced

Summary

Tightens oversight of IRS penalty decisions and forces public penalty reporting. This bill would require written, immediate-supervisor approval before the IRS sends penalty or credit-disallowance notices and would define when a notice becomes an initial determination.

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  • Families and low-income workers would see explicit rules for credit disallowance timing. The bill ties disallowance periods to the child tax credit (section 24), the education credit (section 25A), and the Earned Income Tax Credit (section 32).
  • Taxpayers would gain a procedural protection. Any initial determination to impose a specific penalty amount or a specific disallowance period must be personally approved in writing by the immediate supervisor on or before the date a notice is sent, and routine requests or inquiries generally do not count as initial determinations unless they include a firm penalty offer.
  • IRS staff and the public would face new obligations and transparency. The bill exempts automatically calculated electronic disallowance periods from the timing rule, and it requires Treasury to publish a detailed public report on all penalties no later than 24 months after enactment and annually thereafter, showing each unit's penalty actions from start to finish.

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Bill Overview

Analyzed Economic Effects

3 provisions identified: 2 benefits, 0 costs, 1 mixed.

Supervisor sign-off before penalties

This bill would require an IRS supervisor to personally sign a written approval before the IRS can assess a penalty or start a disallowance period. The written approval must be by the immediate supervisor of the official making the determination. The approval must be obtained on or before the date any notice is sent. This rule would apply to notices sent after the law is enacted.

Annual public IRS penalty reports

This bill would require the Treasury Secretary to publish a public report on every IRS penalty each year. The first report would be due no later than 24 months after enactment, and then every year. The report must show data for each IRS unit with penalty authority and track each penalty from determination through final result.

New rules for tax-credit disallowances

This bill would define when an IRS written notice becomes an "initial determination" for penalties and credit disallowances. Routine IRS questions would generally not count unless they offer a specific penalty amount or a specific disallowance period. It would say which legal time windows the IRS means when it disallows the Child Tax Credit, education credits, and the Earned Income Tax Credit. The bill would also say that disallowance periods calculated automatically by electronic systems do not need the extra approval step. These rules would apply to notices sent after the law is enacted.

Sponsors & CoSponsors

Sponsor

Scott, Tim [R-SC]

SC • R

Cosponsors

  • Sen. Lummis, Cynthia M. [R-WY]

    WY • R

    Sponsored 7/21/2025

  • Sen. Tillis, Thomas [R-NC]

    NC • R

    Sponsored 7/21/2025

  • Sen. Grassley, Chuck [R-IA]

    IA • R

    Sponsored 7/21/2025

  • Sen. Barrasso, John [R-WY]

    WY • R

    Sponsored 7/21/2025

  • Sen. Crapo, Mike [R-ID]

    ID • R

    Sponsored 7/21/2025

  • Sen. Risch, James E. [R-ID]

    ID • R

    Sponsored 7/21/2025

Roll Call Votes

No roll call votes available for this bill.

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