“A bill to amend the Internal Revenue Code of 1986 to modify the procedural rules for penalties.”
No CRS summary available for this bill.
This section amends IRC §6751 to revise supervisory approval requirements for penalties and disallowance periods (i.e., temporary bars on claiming the child tax credit under §24, American opportunity tax credit under §25A, or earned income tax credit under §32 following an improper claim disallowance). Specifically, it (1) requires personal written approval by the immediate supervisor of the initial determination before any notice is sent to the taxpayer, (2) defines initial determination as the first written notice specifying a penalty amount or disallowance period (excluding general requests or inquiries unless offering a specific amount or period, except settlement initiatives), (3) defines disallowance period by reference to the relevant code sections, and (4) eliminates the exception for supervisory approval of disallowance periods automatically calculated electronically. This section also requires the Secretary of the Treasury to issue annual public reports on all IRS-assessed penalties—covering each organizational unit, penalty progression through determination and review, and final results—beginning 24 months after enactment. The amendments apply to notices sent after the date of enactment.