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HR5349119th CongressWALLET

TAS Act

Sponsored By: Representative Moran, Nathaniel [R-TX-1]

Passed Senate

Summary

This bill would push comprehensive IRS modernization with a heavy focus on _digital modernization and taxpayer service_. It would require online filing and processing, public call‑service dashboards, expanded online portals, and new taxpayer protections.

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Bill Overview

Analyzed Economic Effects

22 provisions identified: 14 benefits, 4 costs, 4 mixed.

Stronger awards and privacy for whistleblowers

If enacted, IRS whistleblower awards would not be cut by future sequestration. Awards would include interest at the overpayment rate if the IRS delays notice, starting 180 days after enactment. Whistleblowers could stay anonymous in Tax Court unless a judge finds disclosure serves a greater public interest, and the court would review awards anew and may consider new evidence. The bill would also fix a legal cite so attorney fees tied to whistleblower awards more clearly qualify for a tax deduction.

Clearer notices for denied family credits

If enacted, IRS letters that deny the Child Tax Credit, the American Opportunity Tax Credit, or the Earned Income Tax Credit would have to say which credit, why, and how long any ban lasts. The stronger notice content would start for letters mailed 36 months after enactment. The Tax Court would be able to review these multi‑year bans for petitions filed on or after enactment, and some past bans could be reviewed if earlier letters lacked stated grounds.

Tighter rules and penalties for tax preparers

If enacted, paid preparers would need a PTIN under a suitability and education program (up to 18 hours yearly). PTINs could be suspended or revoked for misconduct or long‑overdue tax debts, and penalties up to $5,000 could apply. Preparers would have appeal rights on denials, suspensions, revocations, or penalties starting 180 days after enactment. Using an invalid preparer ID would bring $250 per failure, capped at $75,000 per year, with inflation adjustments after 2025, and some willful failures would be a felony (fines up to $50,000 for individuals or $100,000 for corporations, and up to 3 years in prison) for returns filed more than 18 months after enactment. More documents would count as “returns” for preparer penalties, and any paid preparer of an offer‑in‑compromise would have to include a preparer ID 180 days after enactment.

Stronger tax privacy and limited new sharing

If enacted, penalties for unauthorized viewing or disclosure of tax returns would rise. Civil damages would be $5,000 per violation. Criminal fines would go up to $250,000 and prison up to 7 years. IRS contractors who willfully fail to protect data and cause a leak would face a felony and a fine of the greater of $500,000 or 25% of the related contract, and the IRS would notify taxpayers when such criminal charges are filed. The bill would also let certain officials share some return information with the Congressional Budget Office, but only if the CBO Director asks the Education Secretary in writing and only as needed; the Education Secretary would report each year to Treasury on how many redisclosures happened and any misuse. These changes would apply to disclosures or inspections after enactment.

E-file, track refunds, and see IRS waits

If enacted, you would be able to e-file more returns and the IRS would have to process them electronically. The IRS would have to use OCR or similar tech to read paper returns and mail, with staged start dates after enactment. By January 1 of the first year more than 12 months after enactment, you would get an online and app view of your return and refund status, including timing and delivery details. About 12 months after enactment, a public dashboard would show real-time IRS phone wait data and callback options.

Fairer rules for offers-in-compromise

If enacted, when your offer‑in‑compromise is accepted, any amounts the IRS collects above the scheduled payments would have to be returned to you, unless you agreed otherwise or the offer is in default and ended. For offers that raise major legal questions, Treasury’s General Counsel would have to issue a written opinion for the file. You would also get an independent review if your offer or installment proposal was returned as nonprocessable or rejected before the IRS told you.

More support for Low-Income Tax Clinics

If enacted, Low‑Income Taxpayer Clinics could count staff pay and equipment as matching funds, but not general overhead. The default match would be 100%. Treasury could set a lower match, as low as 25%, if that helps open or expand clinics. These rules would apply to calendar years after enactment.

More ways to challenge IRS collections

If enacted, in collection due process cases the Tax Court or another federal court could decide the actual tax amount. Courts could also decide liability or refunds when your tax is in an installment plan (and due installments were paid) or is marked not collectible, starting 12 months after enactment. If the Tax Court excuses a late petition, IRS assessment and collection deadlines would extend by the number of late days, preserving review. The IRS could not use your overpayment to offset a disputed tax during certain suspended periods without your consent. For wrongful levies, the return‑period clock would run from the date the IRS received the money, starting 12 months after enactment.

Stronger checks before IRS penalties and contacts

If enacted, the IRS could not assess a penalty or start a credit disallowance period unless a supervisor or the Office of Servicewide Penalties approves it in writing before the appealable notice. Starting 12 months after enactment, the IRS would also send a detailed pre‑notice at least 60 days in advance (120 days if addressed abroad) for certain international information penalties, and you could ask the Independent Office of Appeals to review before assessment. At least 12 months after enactment, the IRS would have to give you at least 45 days to provide requested information before contacting third parties, with narrow good‑cause exceptions.

Stronger IRS Appeals and Tax Court powers

If enacted, the Independent Office of Appeals would weigh litigation risks and be more available for disputes on tax amounts, refunds, penalties, and collection options. Appeals could hire its own counsel and use direct‑hire for non‑enforcement roles. The Tax Court would have stronger subpoena and deposition powers, apply federal judicial disqualification rules, and allow de novo reviews in certain cases, including innocent spouse reviews, for tax years ending after enactment. Whistleblowers could proceed anonymously unless the court finds a greater public interest in disclosure.

Tax relief for Americans held hostage

If enacted, U.S. nationals unlawfully detained abroad or taken hostage (and their spouses) would have the detention period ignored for certain tax deadlines, interest, and penalties for tax years ending after enactment. Treasury, State, and Justice would identify eligible people by January 1, 2027 and yearly after. The IRS would also create a program by January 1, 2027 to refund or abate amounts from January 1, 2021 through the enactment date that were tied to missed acts during detention. Identified people would be notified within 90 days after enactment or after their release.

Fraud by one spouse extends IRS time

If enacted, on a joint return, the IRS could treat one spouse’s intent to evade tax as the couple’s intent for using the longer fraud assessment period. Both spouses could face later assessments. This would take effect on enactment.

No more deadline pause with TAS help

If enacted, the special pause on tax time limits when you seek help from the Taxpayer Advocate Service would end on the enactment date. That would shorten the time you would have to file some claims or seek refunds while using TAS.

Earlier info reports and partnership e-filing

If enacted, many electronic information returns (like Forms 1099 for dividends or interest) would be due by January 31 for calendar years after 2027. Partnerships with more than 50 partners or at least $1,000,000 in assets would have to e-file returns, starting January 1 of the first calendar year after enactment. These changes would speed tax data for recipients but add earlier deadlines and filing requirements for businesses.

Tougher rules and penalties for tax preparers

If enacted, the bill would raise several preparer penalties and add a refund‑misappropriation penalty equal to the greater of $1,000 or the full amount taken. The IRS would build an EFIN validation system within 24 months; software would have to check EFINs at filing, and EROs using invalid EFINs would face a $250 penalty unless they show reasonable cause. Banks that deposit the full refund into the taxpayer’s account would be excepted from the misappropriation penalty. The IRS would have to post final disciplinary decisions about preparers within 30 days after they become final, with other taxpayers’ details redacted; this would start 180 days after enactment. The IRS would also publish each year the top 10 preparer return errors and the top 10 discipline reasons, starting within 36 months of enactment.

Easier Tax Court access and refunds

If enacted, the bill would open simpler Tax Court paths for more cases. A new small‑refund track would cover claims up to $50,000, and some refund/credit cases could reach $2,000,000. The small‑case limit would rise to $100,000 for new proceedings after enactment and would index for inflation after 2026. Some filing deadlines would be nonjurisdictional, allowing late relief and pausing IRS actions when excused; the court could also decide overpayments in some collection cases, subject to timing rules. With party consent, special trial judges would handle more matters, and many changes would start for cases filed 12 months after enactment, with some applying to pending cases.

Extra time for e-filings and overseas notices

If enacted, an authorized electronic filing or payment would count as on time if it is received within 3 business days after the deadline. This rule would apply to items sent one year after enactment, and Treasury would set recordkeeping rules within one year. People who get IRS math‑error notices at addresses outside the U.S. would have 120 days, not 60, to ask for abatement, for notices sent after 180 days from enactment.

More power for the Taxpayer Advocate

If enacted, the IRS would have to give the Taxpayer Advocate access to needed returns, return information, Chief Counsel legal advice, meetings, and documents within two weeks of a written request or by an agreed date. The Taxpayer Advocate could directly hire lawyers who report to the Advocate and do not represent the government in court.

More time for farmers’ estimated taxes

If enacted, eligible farmers and fishermen would have until April 15, not March 1, to meet the estimated‑tax safe harbor. This would apply to tax years beginning after enactment.

Written reasons and extra interest on refunds

If enacted, when the IRS denies a refund claim, it would have to mail a detailed written explanation and tell you how to appeal. If it misses the usual 12‑month decision deadline, your overpayment interest would rise by 1 percentage point for the extra days, up to $500 (the cap can adjust for inflation after 2026). You would have 30 days to appeal to Appeals (90 days if mailed outside the U.S.), and the 2‑year window to sue for a refund would pause during Appeals.

IRS business child care liaison and help

If enacted, the IRS would name a Business Child Care Liaison to help employers and advocates navigate employer child care tax benefits. The liaison would publish a preparer fact sheet, coordinate with agencies, and post a SAM.gov link within 120 days. A public annual report would be due each December 31 after enactment.

Voluntary withholding option for contractors

If enacted, a payer and an independent contractor could agree to treat non‑wage payments like wages for tax withholding. Treasury would write rules within 18 months on which payments qualify and how much to withhold. This option would help some payees manage taxes during the year, while payers would take on withholding tasks when they choose to use it.

Sponsors & CoSponsors

Sponsor

Moran, Nathaniel [R-TX-1]

TX • R

Cosponsors

  • Rep. Sewell, Terri A. [D-AL-7]

    AL • D

    Sponsored 9/15/2025

Roll Call Votes

No roll call votes available for this bill.

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