Sponsors (15)
Introduced March 5, 2025 by French Hill · Last progress March 5, 2025
The bill trades expanded, automated tax relief and clearer administrative pathways for unlawfully detained U.S. nationals (reducing penalties and improving access to refunds) against increased federal costs, privacy risks from interagency data sharing, and implementation burdens on the IRS.
Taxpayers who were 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 period.
Identified eligible individuals will receive prompt notices and the IRS will automatically apply timing relief and refunds based on interagency lists, reducing the burden on affected people to claim relief.
Taxpayers who paid penalties or interest because they couldn’t perform acts covered by section 7508(a)(1) can obtain refunds or abatements for those amounts.
All taxpayers may indirectly bear costs because refunds, abatements, and required IRS system updates increase federal outlays and administrative costs.
The IRS will need resources and interagency coordination to implement the program by the required date, which could divert agency capacity from other taxpayer services during setup.
Sharing identifying information across State, DOJ, and Treasury systems creates privacy risks for listed individuals if data are mishandled or exposed.
Based on analysis of 3 sections of legislative text.
Delays tax deadlines and waives interest/penalties for U.S. nationals unlawfully detained or held hostage abroad (and spouses) and creates a refund program for certain past payments.
Postpones tax filing, payment, interest, penalty, and refund-timing deadlines for U.S. nationals who are unlawfully or wrongfully detained abroad or taken hostage, and for their spouses, by treating the detention/hostage period as disregarded for timing under the Internal Revenue Code. It also creates a refund and abatement program to repay interest, penalties, additions, and related amounts paid by qualifying individuals for tax periods starting Jan 1, 2021 through the date of enactment. Requires the State Department and the Attorney General (through the Hostage Recovery Fusion Cell) to identify affected individuals and give that information to the Treasury/IRS; directs the IRS to implement the deadline relief, set up a refund program, notify eligible people, and update systems to apply the relief by January 1, 2026.