A bill to amend the Internal Revenue Code of 1986 to improve the notice and review procedure with respect to multi-year bans on claiming credits.
- Bill Number
- S. 5141
- Origin Chamber
- Senate
- Congress
- 119th Congress, Session 2
- Policy Area
- Taxation
- Status
- Introduced
- Latest Action
- 2026-07-28: Read twice and referred to the Committee on Finance.
- Last Updated
- 2026-09-28T19:48:19Z
AI-Generated Summary
Purpose This legislation amends the Internal Revenue Code to enhance notice requirements and review processes for multi-year bans on claiming the Child Tax Credit, American Opportunity Tax Credit, and Earned Income Tax Credit. It aims to provide taxpayers with clearer information about credit denials and bans, and to allow court review of those bans.
Key Provisions
- Notice Requirements: The IRS must include specific details in deficiency notices, such as the denied credits, reasons for denial, effects on future years, and grounds for any multi-year ban.
- Tax Court Jurisdiction: The Tax Court gains authority to review and potentially overturn the imposition of bans, including for past bans where notices lacked required details.
- Burden of Proof: The IRS bears the burden of showing that a ban applies, with a higher standard of proof for certain bans similar to fraud cases.
- Changes to Ban Rules: Bans are now triggered by a notice of deficiency rather than only a final determination, and Tax Court rulings can prevent a year from counting toward a ban.
- Statute of Limitations: Time limits for claiming refunds are paused while a ban is under Tax Court review.
Significant Changes to Existing Law
- Replaces the requirement of a "final determination" for imposing bans with a notice of deficiency or Tax Court decision.
- Adds new Tax Court oversight over multi-year bans, which previously lacked direct review.
- Shifts the burden of production to the IRS for proving bans apply.
- Introduces provisions to allow previously denied credits if the Tax Court finds a ban improper.
Potential Impacts
- Government Agencies: The IRS must provide more detailed notices, which may increase administrative work; the Tax Court may see additional cases involving these credits.
- Citizens: Taxpayers receive better information about credit denials and have expanded opportunities to challenge bans, potentially leading to more successful claims or refunds.
- International Relations: No direct effects identified.
Main Stakeholders Affected
- Taxpayers who claim or have been denied the Child Tax Credit, American Opportunity Tax Credit, or Earned Income Tax Credit.
- The Internal Revenue Service, responsible for issuing notices and enforcing bans.
- The U.S. Tax Court, which gains new review authority.
Notable Legal, Constitutional, or Political Implications
- Strengthens taxpayer due process by requiring clearer explanations and independent review of bans.
- May reduce disputes over improper bans through expanded judicial oversight.
- No major constitutional issues are raised in the bill text; it focuses on procedural fairness in tax administration.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Sen. Bennet, Michael F. [D-CO]
Recent Actions
- 2026-07-28: Read twice and referred to the Committee on Finance.
- 2026-07-28: Introduced in Senate
Bill Versions
- To amend the Internal Revenue Code of 1986 to improve the notice and review procedure with respect to multi-year bans on claiming credits. — issued 2026-07-28 — PDF (11 pages)