Fairness in Foreign Filing Act
Sponsored By: Senator Whitehouse, Sheldon [D-RI]
Introduced
Summary
This bill would create a preliminary notice and right of review before assessing certain foreign‑filing penalties. It would also treat many penalties as collectible like taxes and remove select due‑date rules for foreign trust information returns for tax years beginning after December 31, 2026.
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- Taxpayers facing covered penalties would receive a written notice showing the proposed penalty, the tax periods, and the basis, and would have 60 days to request review by the IRS Independent Office of Appeals. For taxpayers outside the United States those timelines are 120 days.
- Trustees and U.S. taxpayers with foreign trusts would see specified information‑return due‑date rules repealed for returns for tax years starting after December 31, 2026.
- The bill would clarify that many penalties are treated as penalties and liabilities collectible like taxes under the tax code, while excepting penalties that must be collected by civil or criminal action or were previously treated that way.
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Bill Overview
Analyzed Economic Effects
3 provisions identified: 2 benefits, 0 costs, 1 mixed.
New review before certain IRS penalties
If enacted, the IRS would have to mail a written notice before assessing certain covered penalties. The notice would identify the proposed penalty, the years involved, the basis for the penalty, and how to request review. Notices must be mailed at least 60 days before any notice and demand (120 days for taxpayers outside the United States). You would have 60 days (120 days outside the United States) to ask the IRS Independent Office of Appeals for review, and the IRS could not collect the penalty while the review is pending or until a final decision. If the notice is mailed before the normal assessment deadline, the bill would pause that deadline during the prohibited collection period and for 30 days after. The rule would not apply if the IRS finds collection is in jeopardy, and the IRS would write rules for implementing these reviews and for simpler reviews of small penalties.
Repeal of foreign trust due dates
If enacted, the bill would strike two specific due‑date requirements for information returns about foreign trusts. The repeal would apply to returns for taxable years beginning after December 31, 2026. Filers of foreign-trust information returns (often high‑net‑worth individuals or entities) would face different filing timing rules after that date, which could ease timing constraints or change when penalties could start.
IRS penalties treated like taxes
If enacted, the bill would say that penalties under the Internal Revenue Code are penalties and liabilities subject to tax collection rules. It would still exclude penalties that are collected by civil or criminal action or that the IRS consistently treated that way before enactment. This would clarify collection processes and could change how some penalties are processed and collected under tax procedures.
Sponsors & CoSponsors
Sponsor
Whitehouse, Sheldon [D-RI]
RI • D
Cosponsors
Sen. Cassidy, Bill [R-LA]
LA • R
Sponsored 7/30/2026
Roll Call Votes
No roll call votes available for this bill.
View on Congress.gov