H.R. 5146

119th CONGRESS 1st Session

To amend the Internal Revenue Code of 1986 to provide for certain rules regarding determination of tax in the case of a receivership.

IN THE HOUSE OF REPRESENTATIVES · September 4, 2025 · Sponsor: Mr. LaHood

Table of contents

• H.R. 5146
  • Sec. 6874. Determination of tax liability by courts.

Sec. 6874. Determination of tax liability by courts.

• (a) In general
  • Except as provided in subsection (b), the court appointing a receiver in any receivership proceeding before any court of the United States or of any State or the District of Columbia may determine the amount or legality of any Federal tax, any fine or penalty relating to such a tax, or any addition to such tax, whether or not previously assessed, whether or not paid, and whether or not contested before and adjudicated by a judicial or administrative tribunal of competent jurisdiction.
• (b) Exceptions
  • The court described in subsection (a) shall not determine—
    • the amount or legality of any Federal tax, fine, penalty, or addition to tax if such amount or legality was contested before and adjudicated by a judicial or administrative tribunal of competent jurisdiction before the commencement of the receivership,
    • any right of the estate to a Federal tax refund, before the earlier of—
      • 120 days after the receiver properly requests such refund, or
      • a determination by the appropriate governmental unit of such request, or
    • the amount or legality of any amount arising in connection with an ad valorem tax on real or personal property of the receivership estate, if the applicable period for contesting or redetermining that amount under any otherwise applicable law has expired.
• (c) Request for determination
  • (1) Provision of address, etc
    • The clerk of the court described in subsection (a) shall maintain records under which the appropriate governmental unit may—
      • designate an address for service of requests under paragraph (2), and
      • describe where further information concerning additional requirements for filing such requests may be found.
    • If the appropriate governmental unit does not designate an address and provide such address to the clerk under subparagraph (A), any request made under paragraph (2) may be served at the address for the filing of a tax return or protest with respect to Federal taxes.
  • (2) Request for determination
    • A receiver may request a determination of any unpaid liability of the estate for any tax incurred before or during the administration of the case by submitting a tax return for such tax and a request for such a determination at the address and in the manner designated in paragraph (1). Unless such return is fraudulent, or contains a material misrepresentation, the estate, the receiver, the individual or entity in receivership, and any successor to such individual or entity are all discharged from any liability for such tax—
      • upon payment of the tax shown on such return, if—
        • (i) the appropriate governmental unit does not notify the receiver, within 60 days after such request, that such return has been selected for examination, or
        • (ii) the appropriate governmental unit does not complete such an examination and notify the receiver of any tax due within 180 days after such request or within such additional time as the court, for cause, permits,
      • upon payment of the tax determined by the court, after notice and a hearing, after completion by the appropriate governmental unit of such examination; or
      • upon payment of the tax determined by the appropriate governmental unit to be due.
• (d) Assessment
  • After determination by the court of a tax under this section, the appropriate governmental unit may assess such tax against the estate, the individual or entity in receivership, any successor to such individual or entity, or any entity arising out of the receivership, as the case may be, subject to any otherwise applicable law.
• (e) Definitions
  • For purposes of this section—
    • The term appropriate governmental unit means a Federal, State, or local governmental unit responsible for the collection of taxes within the jurisdiction of such governmental unit.
• (f) Waiver of sovereign immunity
  • (1) In general
    • Notwithstanding an assertion of sovereign immunity, sovereign immunity is abrogated as to the appropriate governmental unit to the extent set forth in this subsection with respect to the following:
    • In general
      • All matters in subsections (a) through (e).
      • The court described in subsection (a) may hear and determine any issue arising with respect to the application of this section to the appropriate governmental unit.
      • The court may issue against the appropriate governmental unit an order, process, or judgment under this section or under the Federal Rules of Civil Procedure, including an order or judgment awarding a money recovery, but not including an award of punitive damages. Such order or judgment for costs or fees under this section or the Federal Rules of Civil Procedure against the appropriate governmental unit shall be consistent with the provisions and limitations of section 2412(d)(2)(A) of title 28, United States Code.
      • The enforcement of any such order, process, or judgment against the appropriate governmental unit shall be consistent with appropriate law applicable to the governmental unit and, in the case of a money judgment against the United States, shall be paid as if it is a judgment rendered by a district court of the United States or any State court.
      • Nothing in this section shall create any substantive claim for relief or cause of action not otherwise existing under the Federal Rules of Civil Procedure or other applicable law.
  • (2) Deemed waiver
    • If the appropriate governmental unit asserts a claim in any receivership case, the appropriate governmental unit is deemed to have waived sovereign immunity with respect to a claim against the appropriate governmental unit that is property of the receivership estate therein and that arose out of the same transaction or occurrence out of which the claim of the appropriate governmental unit arose.
  • (3) Offset of claims
    • Notwithstanding any assertion of sovereign immunity by the appropriate governmental unit, there shall be offset against a claim or interest of the appropriate governmental unit any claim against such governmental unit that is property of the receivership estate.
• (g) Federal court option
  • Notwithstanding subsection (a), if the appropriate governmental unit objects to state court jurisdiction over any determination under this section, the matter may be transferred to, removed to, or otherwise heard by the United States District Court for the district in which the receivership is pending