Sponsor
Michael F. Bennet
Senator · D-CO
The bill improves transparency and legal remedies for disputes over EITC, child, and education credit disallowances — potentially restoring credits and refunds for some taxpayers — but raises the risk that many low-income households could lose multi-year eligibility and face added pressure and administrative/litigation costs during implementation.
All taxpayers receive clearer IRS deficiency notices that identify which child, education, or EITC claims are denied and explain the grounds, making it easier to understand and respond to assessments.
Taxpayers — especially low-income individuals — gain expanded Tax Court review and clearer evidentiary rules so they can challenge disallowance periods and potentially restore future credit eligibility.
Taxpayers who successfully challenge disallowances can recover refunds or credits for overpayments for years within an improper disallowance period even when ordinary statutory refund windows would otherwise bar recovery.
Low- and moderate-income taxpayers — including parents and students claiming EITC, child, or education credits — could lose eligibility for those refundable credits for multiple years if deficiency notices and disallowances are upheld, reducing household incomes.
The expanded Tax Court jurisdiction and new refund mechanisms are likely to increase litigation and IRS administrative costs, potentially raising compliance costs funded by taxpayers.
Requiring notices to warn that future claims will be barred unless taxpayers provide requested information may pressure low-income or unrepresented taxpayers to produce records quickly and disadvantage those lacking documentation or legal counsel.
Based on analysis of 1 section of legislative text.
Requires IRS deficiency notices to explain denials of CTC, education credits, and EITC and allows Tax Court review of multi-year disallowance periods.
Official title: Amend the Internal Revenue Code of 1986 to improve the notice and review procedure with respect to multi-year bans on claiming credits.
Introduced July 28, 2026 by Michael F. Bennet · Last progress July 28, 2026
Requires the IRS to put specific, detailed explanations into deficiency notices when it denies the Child Tax Credit, education credits, or the Earned Income Tax Credit, and to tell taxpayers if a multi-year disallowance period is being imposed and why. It also gives the U.S. Tax Court clear jurisdiction to review whether those multi-year disallowance periods were properly imposed and allows the Court to decide that issue when a related deficiency case is before it.
Senator · D-CO