Sponsors (2)
The bill strengthens and clarifies taxpayer procedural protections and access to Tax Court review in collection disputes, at the cost of greater litigation and administrative burdens and increased risk that procedural missteps will forfeit tolling protections and refund rights.
Taxpayers in collection disputes (levy or lien) can preserve the suspension (tolling) of the refund-claim statute while their dispute is actively raised at a §6330 hearing and, during that suspension, their IRS overpayments won’t be automatically applied to the disputed liability unless they consent.
Taxpayers can consolidate review: a single Tax Court petition (filed within 30 days) may challenge the §6330 determination, the underlying tax liability, and equitable tolling claims, and Tax Court jurisdiction is preserved even if the IRS later abandons collection, protecting access to judicial review.
The bill clarifies procedural rules—making lien hearings subject to the same hearing rules as levy hearings and clarifying how collection hearings interact with refund-claim statute-of-limitations—improving consistency and predictability in applying deadlines and procedures.
Taxpayers who raise a dispute at a §6330 hearing but fail to preserve it perfectly risk losing tolling protection and thus can forfeit the ability to file timely refund claims—forcing rushed filings or costly litigation to protect rights.
Broader Tax Court review lets more underlying-liability and tolling issues be litigated, which can increase litigation costs, prolong disputes, and produce delays that are costly for taxpayers.
The changes increase administrative burdens and complexity for the IRS (Appeals and litigation offices) — determining whether disputes were ‘properly’ raised, managing suspended offsets, and handling expanded litigation workloads — which can raise enforcement costs and slow case resolution.
Based on analysis of 4 sections of legislative text.
Narrows when limitation suspensions apply in collection disputes, blocks IRS offsets of overpayments during suspension unless consented, and expands Tax Court review of underlying liabilities and equitable tolling.
Introduced December 9, 2025 by Nathaniel Moran · Last progress May 19, 2026
Narrows when the IRS can pause the statute of limitations for refund claims and stops the IRS from automatically applying a taxpayer's overpayment to a disputed tax liability while the taxpayer pursues a collection hearing, unless the taxpayer agrees. It also expands what taxpayers can ask the U.S. Tax Court to review after a collection-hearing determination, explicitly allowing challenges to the underlying tax liability and requests to toll the 30‑day filing deadline. The bill aims to protect taxpayers who properly dispute collection actions by limiting how long filing deadlines are suspended, preventing forced offsets of overpayments during the suspension period, clarifying hearing rules across lien and levy contexts, and preserving Tax Court review rights for underlying disputes and equitable tolling claims.