Sponsors
Introduced April 9, 2025 by John Cornyn · Last progress April 9, 2025
The bill strengthens taxpayer protections, independence of appeals, and remedies for IRS misconduct while lowering some out‑of‑pocket costs, but it increases IRS administrative burdens, litigation and liability risks, and may slow collections and raise risks to IRS employees.
Homeowners, small-business owners, and cash‑constrained taxpayers face a lower risk of losing a primary residence or having a business shut down because the bill requires written hardship findings, higher‑level review before seizing a home, more discretionary lien/levy relief, and removes some upfront payment barriers for offers‑in‑compromise.
Taxpayers (including nonprofits and politically active individuals) gain more independent and transparent dispute resolution: Appeals officers get clearer protections from improper influence, conferences can be independent of Chief Counsel and compliance staff without consent, TIGTA review/ reporting increases oversight of selection criteria, and ADR (mediation/arbitration) access is expanded.
Taxpayers harmed by IRS misconduct or unauthorized disclosures get stronger remedies: statutory damage caps are raised and indexed for inflation, and statutes of limitation for certain claims are extended from 2 to 5 years, giving victims more time and real value recovery.
All taxpayers (and the Treasury) could face higher liability and litigation costs because the bill raises damage caps/ statutory awards, extends limitation periods, and broadens fee‑award eligibility—likely increasing government payouts and more lawsuits against the IRS.
Tax collection could be delayed and near‑term revenue reduced because the bill requires higher‑level reviews, written hardship determinations, and procedural changes before seizing homes or levying businesses and removes some upfront collection mechanisms.
The IRS will face substantial new administrative burdens—more TIGTA reviews and reports, tracking consents for independent Appeals, expanded ADR programs, and personnel‑policy implementation—which could divert resources from other services and slow case processing for taxpayers.
Based on analysis of 32 sections of legislative text.
Strengthens taxpayer protections and IRS accountability: limits Appeals’ scope, protects principal residences, expands ADR, raises penalties, changes IRS personnel rules, and adds a limited audit-cost deduction.
Limits what the IRS Independent Office of Appeals can decide by barring it from raising or deciding issues that were not part of the IRS’s original determination, strengthens protections for taxpayers and small businesses (including limiting liens on a taxpayer’s principal residence and requiring consideration of business viability before levies), and boosts IRS accountability through new employee discipline rules, TIGTA reviews, and prohibitions on certain ex parte communications. It also raises civil and criminal penalty caps, extends statutes of limitations for some taxpayer suits, creates a limited above-the-line deduction for certain audit costs, removes the partial-payment requirement for offers-in-compromise, and expands alternative dispute resolution options including independent mediators.