Sponsors (10)
The bill provides targeted, retroactive tax relief and procedural protections for people unlawfully detained or held hostage (and their families) by extending and waiving refund limits and automating processing, while imposing administrative costs and risks that some eligible people may be missed and causing a modest fiscal impact.
Formerly unlawfully detained or hostage individuals (and their spouses/dependents) can recover taxes and avoid interest/penalties for tax years overlapping Jan 1, 2021 through enactment: refunds or abatements will be available and filing deadlines/penalties are suspended for the period of detention.
The bill extends and waives key refund limitations and channels relief through standard IRS procedures (refunds processed like tax overpayments, §6511(a) extended, §6511(b)(2) waived), making it substantially easier for eligible people to file and obtain refunds.
The State Department/Hostage Recovery Fusion Cell must identify applicable individuals and provide annual lists to Treasury/IRS, creating a formal mechanism to notify eligible people and trigger relief.
If the Hostage Recovery Fusion Cell or State reporting is delayed or contains errors, eligible individuals may not be identified or notified and could miss the extended filing window and relief.
Implementing the program — updating IRS/Treasury systems and processing retroactive refunds/abatements — imposes administrative workload and costs on federal agencies, which may be borne by taxpayers through the federal budget.
The added workload of processing retroactive refunds and abatements could temporarily slow other IRS taxpayer services or cause delays in processing.
Based on analysis of 3 sections of legislative text.
Pauses tax deadlines and waives interest/penalties for U.S. nationals held hostage abroad, allows spouses/dependents to seek refunds or abatements, and creates an IRS claims program.
Postpones federal tax deadlines, stops interest and penalties, and preserves credits/refunds for U.S. nationals who are unlawfully detained or taken hostage abroad and for their spouses. It creates a refund/abatement application program and requires the State Department and Justice Department’s Hostage Recovery Fusion Cell to provide identifying lists to the Treasury so the IRS can process relief. The law adds a new Internal Revenue Code section to pause tax-collection deadlines for the detention period (with an applicable retroactive window starting Jan 1, 2021), directs agencies to share lists of eligible individuals, requires Treasury/IRS system updates, and sets procedures and timing for notifying and refunding eligible individuals or their families.
Official title: 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 February 20, 2025 by Christopher A. Coons · Last progress February 20, 2025