TAS Act
Sponsored By: Senator Crapo, Mike [R-ID]
Introduced
Summary
This bill would modernize IRS services and strengthen taxpayer protections by funding digital tools, improving phone and online access, and expanding independent taxpayer advocacy. It also would change appeals and Tax Court procedures and revise foreign currency, refund, and preparer rules.
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- Low‑income families and financially stressed taxpayers would get targeted relief and outreach, including an automated refund offset bypass, elimination of some installment agreement fees for qualifying users, and a hardship identification program to start within 12 months.
- Americans living abroad and taxpayers with foreign transactions would see reporting studies and rule changes, including raising the personal currency‑exchange exclusion from $200 to $1,000 and raising simplified foreign tax credit thresholds up to $2,000.
- Paid preparers and IRS operations would face stricter standards and new tools: the IRS must digitize paper returns, deploy OCR, publish real‑time dashboards on backlogs and wait times, expand Office of the Taxpayer Advocate access, and impose new preparer ID and misconduct penalties like a $250 penalty for missing IDs and fines up to $5,000 or PTIN suspension.
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Bill Overview
Analyzed Economic Effects
18 provisions identified: 12 benefits, 2 costs, 4 mixed.
More collection help for low-income taxpayers
If enacted, the IRS would have to create a program within 12 months to find taxpayers likely facing economic hardship and tell them about partial-payment installment plans, offers-in-compromise, and Currently Not Collectible status. The bill would stop the IRS from taking some refunds from people who were marked "currently not collectible" and instead require refunds up to the Earned Income Tax Credit amount for eligible years (applies to offsets more than 12 months after enactment). It would also prohibit installment-agreement user fees for taxpayers with income at or below 250% of the poverty level, or for taxpayers who set up an online agreement and pay by debit, starting 12 months after enactment.
Tax relief for sales of foreign homes
This bill would allow an above-the-line deduction for certain foreign-currency losses tied to the sale of a qualified residence located outside the United States. The deductible foreign-currency loss would be limited to the amount of foreign-currency gain recognized in the same taxable year on related mortgage debt. The rule would apply to taxable years beginning after enactment.
More electronic filing and processing
This bill would let and require many federal tax returns to be filed and processed electronically and direct the IRS to use OCR or similar tech to transcribe paper returns unless the IRS finds the tech slower or less reliable. It would also create a mailbox rule: an authorized electronic filing or payment would be treated as on-time if received within three business days after the deadline, with anti-abuse rules. Effective dates vary by return type and start about 1 year to 24 months after enactment.
New rules and penalties for preparers
This bill would let the IRS suspend or revoke a paid preparer's ID (PTIN) and impose a monetary penalty up to $5,000 per event for serious misconduct. It would broaden what counts as a "return" for preparer penalties and add a $250 penalty for preparers who submit offers-in-compromise without a valid preparer ID. The IRS would publish preparer misconduct findings and list the top preparer errors each year. Some rules take effect 180 days after enactment and some penalty amounts are indexed after 2025.
Better IRS phone service and notices
This bill would require the IRS to publish near-real-time phone wait data, provide a wait-time estimator and an API, and use technology to detect and screen automated calls. It expresses that the IRS should offer a callback option for calls not answered within five minutes. The bill would also require delinquency notices at least quarterly (instead of annually) and require each notice to show an estimate of future penalties and interest and list help programs. The dashboard rules start about 12 months after enactment and the quarterly notices after 24 months.
Expanded Appeals access and oversight
This bill would make the Independent Office of Appeals available for nearly all federal tax disputes so more taxpayers could try to settle cases before court. Appeals would have to consider litigation hazards when resolving cases. The IRS could hire Appeals staff faster and appoint counsel who report to Appeals. The bill would also require written supervisory approval before penalties or certain credit-disallowance periods are applied and before appealable notices are sent. Some exceptions apply, such as active criminal investigations and frivolous claims.
Fairer collections and compromise rules
This bill would let courts hear refund or tax liability cases even if you haven't fully paid, when the tax is on an installment plan in good standing or the IRS deems it not collectible. If an offer-in-compromise is accepted, the IRS would have to return amounts collected later that exceed scheduled payments unless you agreed otherwise. The bill would give independent review when offers are returned or rejected before you are notified, require legal opinions placed on file for significant OIC legal issues, change the start date for wrongful-levy refunds to when the IRS received the funds, and require clearer denial notices plus a small extra interest payment when refund decisions are late. Many rules take effect about 12 months after enactment or as otherwise specified.
Safe harbor to avoid late‑pay penalty
If enacted, individuals who pay at least 125% of the tax shown on their prior-year return by the current due date (including extensions) and file on time would not owe the failure-to-pay penalty for the year. Special rules cover prior-year joint returns and timely-filing conditions. This rule would apply to tax years beginning more than 12 months after enactment.
Stronger protections for family tax credits
This bill would let the Tax Court review whether a disallowance period for the Child Tax Credit, the American Opportunity Tax Credit, or the Earned Income Tax Credit was properly imposed. It would require deficiency notices that deny these credits to say which credits are denied and why and to explain any disallowance period and its length. The bill also raises certain burden-of-production and proof rules for specific disallowance periods. These rules apply to petitions and notices after dates set in the bill.
Expanded Tax Court procedures and protections
This bill would give the Tax Court more tools to fix clerical mistakes, reopen final judgments for reasons like mistake or new evidence, and relieve parties in many cases. It would allow special trial judges to hear more matters with party consent and give them limited contempt power. The Court could subpoena electronic files and allow depositions, protect whistleblower anonymity in Tax Court proceedings, treat some filing deadlines as nonjurisdictional, and let the Tax Court determine overpayments and underlying liability in certain Collection Due Process cases. Many provisions apply to cases pending or filed after enactment or when the Court issues rules.
Expanded Tax Court and penalty rules
If enacted, the Tax Court would be able to hear certain suits to recover wrongly assessed taxes or penalties up to an "applicable amount" (the bill sets $2,000,000 for listed items) for actions filed more than 12 months after enactment. The bill would also raise the Tax Court small-case limit from $50,000 to $100,000 and index it after 2026. At the same time, the IRS could treat some penalties as deficiencies subject to deficiency notice and petition rules, which changes how some penalties are handled.
New rules and penalties for preparers
If enacted, the IRS could run a new preparer ID (PTIN) program with suitability checks, education, and background reviews. The bill would let the IRS publish approved courses, require education hours (generally no more than 18 per year), and give preparers a 30-day cure period. It would raise many preparer penalties and caps and make misappropriation penalties larger (for example, some base penalties go to $250 and some caps increase to $50,000 or $75,000). The IRS must also set up a program within 18 months to let e-filed returns with missing preparer IDs be corrected before processing.
Optional withholding on contractor pay
If enacted, you could agree with a payer to have tax withheld from certain non-wage payments, like independent-contractor pay. These payments would be treated as if they were wages for withholding rules. The Secretary would have 18 months after enactment to write rules saying which payments qualify and how much to withhold. This would reduce take-home pay at payment but could reduce later estimated tax bills or underpayment risk.
Stronger Taxpayer Advocate powers
This bill would let the National Taxpayer Advocate (OTA) get return information, Chief Counsel advice, and related documents faster for open help requests. The IRS must provide requested access within two weeks unless another date is agreed. The NTA could directly hire counsel who report to the NTA. During funding lapses, the IRS and OTA could spend limited funds to help taxpayers facing economic hardship.
Higher small foreign-currency thresholds
If enacted, the de minimis exclusion for small personal foreign-currency gains would rise from $200 to $1,000 and be inflation-adjusted after 2025. The simplified foreign tax credit thresholds would also rise from $300/$600 to $1,000/$2,000 and be inflation-adjusted after 2025. These changes would apply to taxable years beginning after enactment.
Tax relief for detained U.S. nationals
If enacted, time spent unlawfully detained abroad or held hostage from January 1, 2021 through enactment would be disregarded for filing dates, interest, penalties, and certain credits. The IRS must set up a program by January 1, 2027 to let eligible individuals (or their spouse or dependents) apply for refunds or abatements and to extend some refund deadlines. The State Department and Justice must give identifying information to the IRS by January 1, 2027 and yearly after.
Partnerships must file on magnetic media
If enacted, partnerships with more than 50 partners or with assets of $1,000,000 or more at year end would be required to file partnership returns on magnetic media. This rule would start for returns filed on or after January 1 of the first calendar year after the bill becomes law. Some partnerships may see modest new compliance or software costs.
Studies on foreign filing and data sharing
This bill would require GAO to study tax-filing burdens for U.S. persons living abroad and require Treasury to report back with actions and legislative recommendations. It would also require a Treasury study to simplify duplicate foreign reporting by nonresident U.S. taxpayers and extend the math-error abatement response time to 120 days for notices mailed outside the U.S. Separately, the bill would allow limited redisclosure of certain education-loan tax return information to the Congressional Budget Office with annual reporting on redisclosures.
Sponsors & CoSponsors
Sponsor
Crapo, Mike [R-ID]
ID • R
Cosponsors
Sen. Wyden, Ron [D-OR]
OR • D
Sponsored 2/26/2026
Roll Call Votes
No roll call votes available for this bill.
View on Congress.gov