Taxpayer Due Process Enhancement Act
Summary
The Taxpayer Due Process Enhancement Act aims to amend the Internal Revenue Code to provide additional protections for taxpayers during collection action proceedings. It suspends the statute of limitations for filing refund claims during collection actions, prevents the IRS from offsetting overpayments against disputed tax liabilities during these proceedings, and expands the jurisdiction of the Tax Court. The bill seeks to ensure fairer treatment and greater access to judicial review for taxpayers involved in disputes with the IRS.
Expected Effects
This act will likely result in increased taxpayer protections and potentially more disputes being resolved in Tax Court. Taxpayers will have more time to file claims and will not have overpayments automatically applied to disputed liabilities. The expansion of Tax Court jurisdiction could lead to more cases being heard and potentially slower resolution times.
Potential Benefits
- Extended Time to File Claims: Taxpayers gain more time to file claims for credit or refund during collection action proceedings.
- Protection of Overpayments: Overpayments are not automatically credited against disputed liabilities, providing taxpayers more control.
- Expanded Tax Court Jurisdiction: Tax Court can review underlying tax liabilities, offering a more comprehensive review process.
- Clarification of Hearing Rules: Clarifies the application of levy hearing rules to lien hearings, promoting consistency.
- Enhanced Due Process: Overall, the act enhances due process rights for taxpayers in disputes with the IRS.
Potential Disadvantages
- Potential for Increased Litigation: Expanded Tax Court jurisdiction could lead to more litigation and slower case resolution.
- Complexity for IRS Administration: The new rules may create administrative complexities for the IRS in handling collection actions.
- Delayed Revenue Collection: Prohibiting the crediting of overpayments could delay revenue collection for the government.
- Uncertainty in Application: The scope of 'properly disputed' tax liability may lead to disputes over interpretation.
- Potential for Abuse: Taxpayers might use the extended time to file claims strategically, potentially delaying resolution.
Constitutional Alignment
The Taxpayer Due Process Enhancement Act aligns with constitutional principles of due process, as guaranteed by the Fifth Amendment. By providing additional protections for taxpayers during collection action proceedings, the act ensures fairer treatment and access to judicial review. The expansion of Tax Court jurisdiction also supports the principle of checks and balances by providing an avenue for taxpayers to challenge IRS determinations.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).