Federal Receivership Fairness Act

This bill sets clear rules for how taxes are handled when a court puts a person or business into receivership. The court in charge can decide how much federal tax is owed, including related fines and penalties, unless that exact tax issue was already decided before the receivership began . A receiver can ask for a tax decision by filing a return and a request. If the tax agency doesn’t choose the return for an audit within 60 days, or doesn’t finish an audit within 180 days, and the shown tax is paid, the estate, the receiver, and the person or business are cleared of further liability for that tax. They are also cleared after paying whatever the court or the tax agency ultimately decides is due. The court can issue orders, including money judgments (but not punitive damages), against the tax authority to carry out these rules, and certain immunity defenses by the government are limited in this process.

There are limits. The court can’t decide a federal tax refund request until either 120 days after the receiver asks for it or until the tax agency makes a decision. It also can’t change property tax amounts if the deadline to challenge them has already passed. After a court decision on tax, the tax agency can still make a formal assessment against the estate or the business, as allowed by other laws. If the government objects to a state court handling these issues, the case can be moved to federal district court .

Key points

• Who is affected: People or businesses in receivership, court-appointed receivers, and tax agencies at all levels .
• What changes: The court running the receivership can settle federal tax debts and related penalties; receivers can trigger firm timelines (60/180 days) that lead to a clean release from liability after payment; courts can issue money judgments against tax authorities; government immunity is limited for these matters; and tax agencies can assess tax after the court’s decision .
• When it applies: During a receivership, once the receiver files the tax return and request; refund decisions have a 120-day waiting rule, and property tax disputes must still meet existing deadlines.