IRS Accountability and Taxpayer Protection Act

This bill aims to add more oversight before the IRS can hit someone with a penalty or ban them from claiming certain tax credits. It would require a supervisor to personally sign off, in writing, on the first decision to apply a penalty or a “disallowance period,” and that approval must happen before any notice goes out to the taxpayer. It also clarifies that routine IRS requests for info don’t count as a real penalty decision unless they offer a specific penalty amount or a specific ban period. These rules would apply to notices sent after the bill becomes law .

A “disallowance period” is defined for credits under sections 24, 25A, and 32 of the tax code. The bill makes clear that bans on these credits can’t be set automatically by computers without the required supervisor approval. The Treasury must also publish a report within 24 months and then every year, showing how penalties move through the IRS—from start to finish—across all IRS units .

• Who is affected: Taxpayers facing IRS penalties or possible bans on credits under sections 24, 25A, and 32
• What changes: Written supervisor approval before penalties or bans; clearer rules on what counts as the first penalty decision; annual public reporting on penalties; no automatic bans without approval
• When: Applies to IRS notices sent after the law is enacted; first public report due within 24 months, then yearly