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119-s-3587119th CongressWALLET

No Tax on Wrongful Delay Act of 2026

Sponsored By: Senator Blackburn, Marsha [R-TN]

Introduced

Summary

This bill would exclude from gross income interest the IRS pays to taxpayers on overpayments after audits or tax litigation. It adds a new tax-code rule saying interest required under section 6611 on overpayments following an IRS examination, a taxpayer suit for a credit or refund, or a civil action by the United States would not be taxable. That change means individuals and businesses who win audits or refund suits would keep more of the interest the IRS pays. The rule would apply to taxable years beginning after December 31, 2025.

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Bill Overview

Analyzed Economic Effects

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

No tax on interest after audits

If enacted, you would not count as taxable income interest the IRS must pay under section 6611 on an overpayment of tax when that interest is paid after: (1) an IRS examination under section 7602, (2) a suit or proceeding you bring for a tax credit or refund, or (3) a civil action the United States brings to collect or recover taxes. This exclusion would lower your federal taxable income and could reduce your tax bill if you receive such interest. The rule would apply to taxable years beginning after December 31, 2025.

Sponsors & CoSponsors

Sponsor

Blackburn, Marsha [R-TN]

TN • R

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

No roll call votes available for this bill.

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