Sponsors (2)
Requiring supervisors to personally sign off on IRS penalty determinations aims to reduce wrongful penalties and improve accountability, but it may slow processing, increase agency workload and costs, and could be ineffective if approvals are routinely rubber‑stamped.
Taxpayers will face fewer incorrectly assessed penalties because IRS supervisors must personally sign off on proposed penalty determinations, increasing review accuracy and reducing erroneous enforcement actions.
IRS managers and employees gain clearer accountability and oversight for penalty decisions, which should improve consistency of enforcement and reduce rogue actions.
Taxpayers and IRS staff will have time to adjust because the rule is delayed until after December 31, 2025, allowing the agency to implement procedures and train personnel to reduce disruption.
Taxpayers may experience slower IRS processing and longer timelines for receiving penalty notices because each determination requires additional supervisory approval.
IRS supervisors and the agency will face increased workload and potential bottlenecks, which could raise staffing costs or divert time from other oversight duties.
Taxpayers and IRS staff could see little benefit if supervisors routinely rubber‑stamp approvals to avoid delays, turning the new requirement into extra paperwork without meaningfully reducing incorrect penalties.
Based on analysis of 2 sections of legislative text.
Requires written, personal supervisor approval before IRS penalty proposals are sent or penalties are assessed, effective for actions after Dec 31, 2025.
Requires a written, personal approval from the immediate supervisor (or a higher-level official designated by the Secretary) of the IRS employee who made an initial determination before any federal tax penalty can be assessed or before a written communication proposing a penalty is sent to a taxpayer. It also sets an effective date rule that applies to penalty notices and assessments issued after December 31, 2025. The Act includes a provision establishing an official short title.
Introduced September 15, 2025 by Glenn Grothman · Last progress December 2, 2025