Sponsors (3)
The bill increases transparency and provides modest, predictable compensation for long-delayed refunds, while capping federal costs — but it may undercompensate those with large refunds and imposes additional administrative burden and classification complexity on the IRS.
Taxpayers denied refunds will receive a detailed written explanation and, when applicable, instructions on how to appeal, improving transparency and ability to contest denials.
Taxpayers whose refund decisions are delayed beyond 12 months will receive an extra 1 percentage point in overpayment interest (subject to the cap), providing a modest monetary remedy for IRS delay.
The additional interest payment is capped at $500 (indexed after 2026), which limits fiscal exposure for the Treasury and makes the remedy predictable for taxpayers.
Taxpayers with large overpayments may receive only up to $500 extra interest, which may substantially undercompensate them for long delays.
The IRS will face added administrative workload to produce detailed explanations and to track timing for interest calculations and appeals, potentially increasing compliance costs or slowing other IRS services.
A narrow definition of 'frivolous claim' may still force the IRS into complex classification and timely denials without full explanations, increasing disputes and administrative complexity.
Based on analysis of 2 sections of legislative text.
Requires IRS to provide written explanations for denied refund claims and raises interest on late determinations by 1 percentage point, capped at $500 (inflation‑adjusted).
Official title: To amend the Internal Revenue Code of 1986 to improve responses by the Internal Revenue Service to claims for refund, and for other purposes.
Introduced June 25, 2026 by Deborah K. Ross · Last progress June 25, 2026
Requires the IRS to give taxpayers a detailed written explanation when it denies a refund claim (in whole or in part) and to tell them how to appeal when an appeal right exists. If the IRS does not decide a claim by a set deadline (generally 12 months after receipt), the overpayment interest rate the IRS pays on late refunds rises by 1 percentage point for the period after that deadline, with additional interest to the taxpayer capped at $500 (indexed for inflation after 2026). Excludes claims already judicially or administratively deemed frivolous from the detailed-explanation requirement (but still requires written denial by the deadline). The new rules apply to refund claims received more than 12 months after the law takes effect.