House Passes Moran-Sewell Bipartisan Tax Court Legislation to Protect Taxpayer Rights

U.S. Representative Nathaniel Moran (TX-01) released the following statement following the unanimous passage of H.R. 6506, the Taxpayer Due Process Enhancement Act. This bipartisan legislation previously passed out of the Ways and Means committee in December.

"Today, we are strengthening taxpayer rights and ensuring Americans have a clear path to challenge the IRS," said Rep. Moran. "This legislation advances fairness and accountability in our tax system-guaranteeing no one loses their day in court over arbitrary deadlines or IRS overreach. By protecting taxpayer rights, extending filing windows, and strengthening Tax Court jurisdiction, we are delivering real, lasting safeguards for every American."

The bill makes three changes to Tax Court proceedings to protect taxpayers' rights:

• Pauses Unfair Deadlines - When a taxpayer is undergoing collection proceedings, the statutory deadline for filing a claim for a refund will be held open to account for the pending collection proceeding. Currently, only three years is permitted whether you are currently challenging a tax dispute before the court or not.

• Protects Taxpayer Rights - Unless the taxpayer consents, the IRS will no longer be allowed to apply a taxpayer's annual overpayments to a taxpayer's disputed tax liability during collection proceedings. This prevents the IRS from pulling the jurisdictional rug out from under a taxpayer who is involved in a collection proceeding.

• Expands the Tax Court's Jurisdiction - Codifies the Tax Court's ability to review determinations and existing tax liabilities, as well as make equitable tolling decisions for collection proceedings so the taxpayer is not deprived of his or her day in court.

"America's Tax Court exists to mediate disagreements between the IRS and taxpayers. Every American deserves the right to dispute IRS actions taken against them and not have their claim to due process circumvented or denied," said Ways and Means Committee Chairman Jason Smith (MO-08). "Unfortunately, as the system stands today, the IRS can abandon the judicial review process while still imposing penalties on individuals who will have no real way to challenge what the government claims. As a former county judge, Representative Moran is leading the charge through the Taxpayer Due Process Enhancement Act to restore taxpayer rights and ensure Americans can have their day in court."

Watch Congressman Moran's floor remarks as delivered, here.

Read the full text of the bill here.

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