Sponsors (2)
The bill strengthens taxpayer procedural protections and clarifies Tax Court review rights during collection disputes, but it narrows some statute-of-limitations protections and may increase risks of forfeiture, administrative complexity, and litigation costs for taxpayers and the IRS.
Taxpayers disputing assessed liabilities at CDP or equivalent hearings keep refunds/overpayments from being automatically applied to the disputed tax without their consent, preserving their cash flow and control during disputes.
Taxpayers can promptly seek judicial review in Tax Court of CDP determinations and underlying tax liability (including requests for equitable tolling), preserving access to final adjudication and reducing the risk of losing review rights from delays.
Clarifies that the suspension of limitation periods tied to collection hearings applies only to refund/credit claims that directly relate to the contested liability, giving clearer rules that reduce prolonged uncertainty and help the IRS close out suspended periods when taxpayers forfeit rights.
Taxpayers who do not precisely preserve claims at a §6330 hearing risk losing unrelated refund or credit claims because the suspension will not protect claims that are not directly related to the contested liability.
Limitation periods may begin running sooner after procedural missteps or certain court orders, increasing the risk that taxpayers will forfeit claims and suffer financial losses if deadlines are missed.
The narrower scope of suspension and the need to determine whether a refund “relates to” a contested liability could generate additional disputes and litigation over procedural scope, increasing administrative burden for the IRS and contested taxpayers.
Based on analysis of 4 sections of legislative text.
Limits tolling of refund-claim deadlines during collection hearings, bars IRS from applying overpayments to disputed taxes without consent, and expands Tax Court review after CDP hearings.
Limits how long the statute of limitations for refund claims is paused during IRS collection hearings, prevents the IRS from automatically applying an overpayment to a tax that is actively disputed at a hearing (unless the taxpayer agrees), clarifies hearing scope for collection and lien matters, and expands Tax Court review to include the underlying disputed liability and tolling issues. Most changes take effect on enactment or apply to periods and petitions after enactment.
Official title: Taxpayer Due Process Enhancement Act
Introduced December 9, 2025 by Nathaniel Moran · Last progress May 20, 2026