Sponsors (15)
Official title: To amend the Internal Revenue Code of 1986 to postpone tax deadlines and reimburse paid late fees for United States nationals who are unlawfully or wrongfully detained or held hostage abroad, and for other purposes.
Introduced March 5, 2025 by French Hill · Last progress March 5, 2025
The bill provides targeted tax-timing relief, refunds, and automated identification/notice to help U.S. nationals unlawfully detained or held hostage (and their families) recover from tax penalties, at the cost of additional federal outlays, implementation burdens, privacy risks from interagency data sharing, and some risk that errors or short claim windows could leave eligible people without relief.
U.S. nationals unlawfully detained or held hostage (and their spouses/dependents) will have the detention period excluded from tax filing, payment, and refund timing and can receive refunds or abatements of interest and penalties assessed during that detention.
Eligible individuals (or their spouse/dependents) get extended opportunity to claim refunds because the IRS must allow claims for 1 year after notice (rather than relying solely on the normal 3-year clock), and State/DOJ are directed to identify affected people and provide prompt notice to them.
Affected people benefit from required interagency identification and information-sharing (State and DOJ providing lists to Treasury/IRS) so IRS systems can automatically apply relief or notify people, reducing the burden on individuals to claim benefits.
Taxpayers and the federal budget will bear the cost of refunds/abatements and IRS system updates, increasing federal outlays and potentially raising administrative costs paid by taxpayers.
Individuals identified on interagency lists face privacy and confidentiality risks because identifying information will be shared across State, DOJ, and Treasury/IRS systems.
If interagency lists contain errors, incorrect determinations could trigger improper refunds or timing relief that later need correction, creating administrative hassle and potential disputes for affected taxpayers.
Based on analysis of 3 sections of legislative text.
Postpones tax deadlines and waives/returns penalties and interest for U.S. nationals unlawfully detained or held hostage abroad (and spouses), and creates a refund program for amounts paid Jan 1, 2021–enactment.
Postpones tax filing, payment, interest, penalty, and refund-timing rules for U.S. nationals unlawfully or wrongfully detained abroad or taken hostage, and for their spouses, by treating the detention period as disregarded for timing under the Internal Revenue Code. Creates an IRS refund and abatement program to return penalties, additions, and interest paid for failures tied to those missed deadlines during the period January 1, 2021 through enactment, and requires the State Department and Justice Department (via the Hostage Recovery Fusion Cell) to provide lists of qualifying individuals to Treasury for implementation. Requires the Treasury/IRS to update systems and to issue notices and refunds; sets deadlines for program establishment and data-sharing (initial lists and implementation steps due by January 1, 2026); and makes the new timing rule effective for taxable years ending after enactment and the refund program applicable to prior taxable years ending on or before enactment.