The TAS Act – Summary

Introduced in the United States Senate

Title I – Tax Administration and Customer Service

• Sec. 101 – Digitization of Tax Returns and Correspondence
  Requires IRS to accept/process all returns (and amended returns) electronically and digitize returns/correspondence using OCR or similar tech, with limited exception if an alternate process is faster/more reliable (with notice to Congress).
• Sec. 102 – Dashboard for Backlogs and Wait Times
  Directs IRS (to the extent practical) to create a real-time IRS.gov dashboard showing call volume, backlogs, wait times, and callback availability; also requires monthly telephone service reporting and efforts to screen automated calls.
• Sec. 103 – Expanded Electronic Status Tools (Refunds/Amended Returns/Online Account)
  Requires upgrades to “Where’s My Refund?”, “Where’s My Amended Return?”, and Online Account to give more individualized status info (e.g., if return is suspended, what IRS requested, and how to respond).
• Sec. 104 – Expansion of Callback Technology (Sense of Congress)
  Expresses that by 2028 IRS should offer callbacks on all lines/extensions when calls aren’t answered within 5 minutes.
• Sec. 105 – Expansion of Online Accounts (Taxpayer + Representative access)
  Requires upgraded online accounts so taxpayers (including businesses) and certain reps can view images of returns, documents, notices/letters (rolling 6-year period) and respond to IRS inquiries through the account; also improves practitioner access across clients and requires an anti-unauthorized-disclosure program and annual report.
• Sec. 106 – Automation of Refund Offset Bypass for Certain CNC Taxpayers
  For taxpayers marked currently not collectible (CNC), IRS must automatically bypass refund offsets for the EITC (reducing hardship and the rush of time-sensitive OBR requests).
• Sec. 107 – Installment Agreement Fees Eliminated for Certain Individuals
  Waives fees for online installment agreements and for other installment agreements requested by low-income taxpayers.
• Sec. 108 – Inform Hardship Taxpayers of Collection Alternatives
  Requires IRS to inform certain installment agreement requesters-where data indicates hardship-about other options (e.g., partial-pay IA, OIC, CNC) and report to Congress on the accuracy of hardship identification.
• Sec. 109 – Quarterly Notices for Certain Delinquencies
  Requires IRS to send delinquency notices at least quarterly (with exceptions), disclose penalty/interest accrual costs, and highlight programs that may help.
• Sec. 110 – LITC Funding “Unlocked”
  Removes obsolete caps on Low-Income Taxpayer Clinic grant funding and allows reduced matching requirements (down to 25%) if it increases taxpayer service.
• Sec. 111 – Streamline Chief Counsel Reviews of OICs
  Eliminates blanket Counsel review for all accepted OICs above $50,000; instead requires review only where Secretary determines there are significant legal issues.
• Sec. 112 – Procedural Requirements for Penalties and Disallowance (“Bans”)
  Clarifies timing/authority for written supervisory approval under §6751(b) (before certain appealable penalty notices) and extends approval to multi-year credit bans (EITC/CTC/AOTC); also mandates an annual penalties report.
• Sec. 113 – Return Amounts Collected Above Accepted OIC Amount
  Requires IRS to release levies upon accepting an OIC and return amounts collected in excess of the agreed OIC amount (unless agreement provides otherwise or taxpayer defaults).
• Sec. 114 – Extend/Clarify Wrongful Levy Return Period (Electronic Levy Date Rule)
  Defines “date of levy” for return-of-wrongful-levy purposes as the date IRS receives the funds, harmonizing treatment between paper and electronic levies.
• Sec. 115 – Reports to Congress (Implementation + Fraud + Complexity)
  Requires implementation reporting to tax-writing committees; annual reporting on fraud/identity theft efforts; and restores annual complexity-source reporting separate from NTA reports.

Title II – American Citizens Abroad

• Sec. 201 – Report on Combined Tax + FBAR/International Reporting
  Within 180 days, Treasury must report to Congress on steps to combine/simplify reporting and eliminate duplication (after consulting NTA and citizens abroad), including legislative recommendations.
• Sec. 202 – GAO Study + Treasury Response on Abroad Compliance Burdens
  GAO must report on tax compliance burdens for Americans abroad; Treasury must then report actions taken and recommend legislation to address issues identified.
• Sec. 203 – Simplify Currency Exchange Rules
  Raises foreign currency gain personal-transaction exemption to $1,000 (indexed), allows certain mortgage currency gains/losses to offset qualified residence gain/loss, allows tax-free refinancing of foreign-currency mortgages on overseas qualified residences, and permits average exchange rates for qualifying salary/income.
• Sec. 204 – Increase Threshold for Simplified Foreign Tax Credit Election
  Increases simplified FTC election threshold to $1,000 ($2,000 MFJ), indexed for inflation.
• Sec. 205 – More Time for Abroad Taxpayers to Request Math Error Abatement
  Gives taxpayers residing abroad an additional 60 days (total 120) to respond to math error notices.

Title III – Judicial Review

• Sec. 301 – Pre-hearing Subpoenas in Tax Court
  Gives Tax Court express authority to issue third-party subpoenas for documents/testimony before a hearing date to facilitate settlement and trial prep.
• Sec. 302 – Tax Court Relief from Final Judgment / Clerical Error Fixes
  Authorizes Tax Court relief from final decisions in limited “justice requires” situations (similar to FRCP 60) and clarifies authority to correct non-final clerical errors/oversights.
• Sec. 303 – Expand Special Trial Judge Authority + Limited Contempt Power
  Allows party consent to assign certain matters to Special Trial Judges for judgment entry and extends limited contempt authority.
• Sec. 304 – Disqualification Standards for Tax Court Judges/STJs
  Applies the same judicial disqualification standards used for other federal judges to Tax Court judges and Special Trial Judges.
• Sec. 305 – Notice and Review of Multi-year Credit Bans
  Requires IRS to explain EITC/CTC/AOTC bans in deficiency notices, grants Tax Court jurisdiction to determine/redetermine bans with the deficiency case, and clarifies burdens (production for 2-year bans; proof for 10-year fraud bans), with a transition rule.
• Sec. 306 – De Novo Review / Evidence Rules for Innocent Spouse Relief
  Allows courts to consider all relevant evidence in innocent spouse reviews (not limited to prior IRS record except limited cases) and clarifies the defense can be raised in district/bankruptcy courts where liability is at issue.
• Sec. 307 – Clarify Court Filing Deadlines / Equitable Tolling
  Clarifies Tax Court jurisdiction to decide tolling/extension issues for key deadlines (deficiency, CDP, innocent spouse), clarifies dismissal for no tolling isn’t merits-based, and tolls deadlines when filing location is inaccessible part of the due day.
• Sec. 308 – CDP Liability Challenges (prior opportunity must be in Tax Court)
  Allows taxpayers to contest underlying liability in CDP if they lacked a prior opportunity to dispute it in Tax Court (rather than being barred by a prior non-judicial Appeals opportunity).
• Sec. 309 – Tax Court Refund Authority in CDP Cases
  Authorizes Tax Court to order refunds/credits in CDP cases where it can determine underlying liability, subject to §6511 limitations.
• Sec. 310 – Expand Tax Court Jurisdiction to Hear Refund Suits (≤ $2M)
  Permits Tax Court to hear refund/credit suits (up to $2,000,000) that otherwise could go to district court or Court of Federal Claims.
• Sec. 311 – Use Deficiency Procedures for Certain Penalties Not Otherwise Assessable
  Lets IRS assess certain civil penalties via deficiency procedures when not otherwise assessable under Title 26, with restrictions on multiple notices (except continuation penalties).
• Sec. 312 – Refund Claims Without Full Payment (Flora rule exception)
  Creates exception to full-payment rule for taxpayers paying in installments or in CNC status (when no other judicial-review proceeding is pending), with potential dismissal (refile later) if installment payments stop/CNC ends.
• Sec. 313 – Increase “Small Tax Case” Threshold
  Doubles Tax Court small case (S case) threshold from $50,000 to $100,000 and indexes for inflation.

Title IV – Office of the Taxpayer Advocate

• Sec. 401 – NTA Direct Hire Authority for Attorneys
  Allows NTA to hire attorneys reporting to NTA (not Chief Counsel) to support TAS independence; their interpretations aren’t binding on Treasury.
• Sec. 402 – NTA Personnel Authority for All TAS Employees
  Extends NTA’s independent personnel authority to TAS national office staff (not just local offices).
• Sec. 403 – TAS Access to IRS Info/Legal Advice/Meetings
  Clarifies TAS’s right to timely access the information/legal advice needed for statutory duties and to participate in taxpayer conferences upon request; sets a default two-week response window and requires reporting failures to Congress.
• Sec. 404 – Repeal TAS-Request Statute of Limitations Suspension
  Repeals §7811(d), which would extend assessment/collection limitations when TAS help is requested in writing (a rule IRS hasn’t implemented and that would treat written vs phone requests differently).
• Sec. 405 – Hardship Assistance During Government Shutdowns
  Clarifies IRS/TAS may incur obligations during a lapse in appropriations as needed to help hardship taxpayers and comply with Taxpayer Assistance Orders.

Title V – Tax Return Preparers

• Sec. 501 – Penalties for Preparers Who Alter Returns After Signature
  Expands “return” definition for preparer penalties to include documents that purport to be returns-capturing post-signature alterations (e.g., changing direct deposit info).
• Sec. 502 – Penalties for Failure to Provide Valid PTIN / Valid EFIN + New Felony for Willful PTIN Violations
  Creates/clarifies $250 penalties for furnishing invalid PTINs/EFINs (with reasonable-cause relief and an avoidance program), and makes willful PTIN noncompliance a felony (up to $50k/$100k corp and/or 3 years).
• Sec. 503 – Increase Various Preparer Penalties + Expand Misappropriation Coverage
  Increases multiple §6695 penalties (copies, signatures, ID numbers, etc.) and expands the misappropriation/negotiation penalty to cover refund theft via altered direct deposit info.
• Sec. 504 – Authority to Deny/Revoke/Suspend PTINs + CE/Suitability Standards
  Creates a PTIN regime for non-credentialed preparers including suitability checks, background/tax compliance checks, up to 18 hours CE, sanctions/appeals, preliminary suspensions to prevent harm, transparency (public posting of discipline and common errors), and a GAO report on state info sharing.

Title VI – Independent Office of Appeals

• Sec. 601 – Appeals Can Hire Its Own Attorneys
  Allows Appeals to hire attorneys reporting to Chief of Appeals (not Chief Counsel) to enhance independence; they don’t litigate and their interpretations aren’t binding.
• Sec. 602 – Appeals Direct Hire Authority
  Allows Appeals to direct-hire certain individuals to improve recruiting and reduce dependence on enforcement-function staffing.
• Sec. 603 – IRS Must Respond to Refund Claims + Appeals Path for Claim Denials/Nonresponse
  Requires IRS to issue a notice of determination on timely, properly filed refund claims within 12 months (or agreed later), with explanation and Appeals instructions; allows appeal within 30 days; treats IRS nonresponse as disallowance (with appeal rights) and may add interest (capped) if refund due; suspends suit-filing period during appeal.
• Sec. 604 – Appeal Rights for “Returned” (Non-processable) OICs
  Allows taxpayers to appeal a determination that an OIC is non-processable (returned) to Appeals.
• Sec. 605 – Appeals Mission/Duties + Right of Appeal Clarified; Limited Exceptions Codified
  Codifies that Appeals must consider hazards of litigation broadly (liability, penalties, collection, discretion), emphasizes taxpayer right to Appeals, and codifies limited categories of required-denial access (e.g., purely constitutional validity claims absent court ruling; frivolous; closing agreements; criminal interference; and certain designated-for-litigation cases with limits).

Title VII – Whistleblowers

• Sec. 701 – De Novo Review of Whistleblower Award Determinations
  Clarifies Tax Court reviews whistleblower award determinations de novo (fresh look) rather than abuse of discretion, based on administrative record and newly discovered evidence.
• Sec. 702 – Exempt Whistleblower Awards from Sequestration
  Exempts IRS whistleblower awards from budget sequestration so awards aren’t reduced below statutory minimums.
• Sec. 703 – Whistleblower Privacy Protections in Tax Court
  Requires whistleblowers to proceed anonymously in Tax Court unless heightened societal interest outweighs harm.
• Sec. 704 – Modify Whistleblower Annual Report (Top 10 Scheme Areas)
  Requires annual report to list top 10 areas of identified tax avoidance schemes.
• Sec. 705 – Interest on Whistleblower Awards for Delay
  Imposes interest if IRS fails to provide preliminary award recommendation within 12 months after all proceeds collected and contest/refund opportunities are exhausted (effective dates apply).
• Sec. 706 – Fix Attorney Fee Deduction/Inclusion Issue (Conformity)
  Conforms treatment of attorney’s fees for discretionary whistleblower awards with the mandatory program and other federal whistleblower programs.

Title VIII – Stopping Tax Penalties on American Hostages

• Sec. 801 – Postpone Deadlines for Hostages/Wrongfully Detained Abroad + Abate/Refund Penalties/Interest
  Extends tax deadlines for eligible unlawfully/wrongfully detained/held-hostage individuals (and spouses) and requires abatement/refund of interest/penalties for postponed period, based on State/DOJ-provided eligibility list.
• Sec. 802 – Extend Refund Claim Period for Hostage-Related Penalties/Interest (2021–Enactment)
  Extends §6511 limitations period for claiming refunds of interest/penalties/additions attributable to 1/1/2021 through enactment until one year after IRS notice; requires IRS to send notices.

Title IX – Small Business

• Sec. 901 – Voluntary Withholding Agreements for Independent Contractors
  Expressly permits voluntary withholding on non-wage remuneration and directs Treasury guidance on withholding amounts and payment types.
• Sec. 902 – Failure-to-Pay Penalty Safe Harbor for Individuals
  Waives failure-to-pay penalty if individual pays 125% of prior-year tax by the original due date (no extension consideration), with multiple eligibility limits; interest still accrues.
• Sec. 903 – Extend Mailbox Rule to Electronic Submissions/Payments
  Applies “timely sent = timely filed/paid” concept to approved electronic methods if received within 3 business days, with an anti-abuse carveout; requires regs.
• Sec. 904 – More Specific Third-Party Contact Notices
  Requires IRS third-party contact notice to identify specific info to be requested and give taxpayer chance to provide it first, with exceptions (e.g., jeopardy, taxpayer wouldn’t have info).

Title X – Miscellaneous

• Sec. 1001 – Allow Redisclosure of Certain Education-Loan Tax Info to CBO
  Amends §6103 to let CBO receive certain borrower income data (now sourced from IRS via ED) for congressional analysis; requires ED annual reporting on redisclosures and unauthorized access/use.
• Sec. 1002 – Authority to Require Large Partnerships to E-File
  Authorizes Treasury to require e-filing for partnerships meeting asset ($1M+) or gross receipts ($250k+) thresholds (in addition to existing e-file rules).
• Sec. 1003 – No Unlimited SOL Extension for Victims of Preparer Fraud
  Clarifies fraudulent-return SOL exception applies only when the taxpayer intended evasion-preparer-only misconduct won’t indefinitely keep the assessment period open.
• Sec. 1004 – Technical Amendment (Disaster Related Extension of Deadlines Act / §7508A)
  Makes a technical correction to §7508A.