SenateS. 5173119th Congress
Fairness in Foreign Filing Act
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[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 5173 Introduced in Senate (IS)]
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119th CONGRESS
2d Session
S. 5173
To amend the Internal Revenue Code of 1986 to treat tax penalties as
assessable in the same manner as taxes, to provide notice requirements
for certain penalties, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
July 30, 2026
Mr. Whitehouse (for himself and Mr. Cassidy) introduced the following
bill; which was read twice and referred to the Committee on Finance
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to treat tax penalties as
assessable in the same manner as taxes, to provide notice requirements
for certain penalties, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Fairness in Foreign Filing Act''.
SEC. 2. TREATMENT OF TAX PENALTIES.
(a) Treatment of Penalties as Taxes.--Section 6671(a) of the
Internal Revenue Code of 1986 is amended--
(1) by striking ``The penalties and liabilities provided by
this subchapter'' and inserting the following:
``(1) In general.--Any penalties provided by this title,
including the penalties and liabilities provided by this
subchapter,'',
(2) by striking ``the penalties and liabilities provided by
this subchapter.'' and inserting ``the penalties provided by
this title, including the penalties and liabilities provided by
this subchapter.'', and
(3) by adding at the end the following new paragraph:
``(2) Exception.--Paragraph (1) shall not apply to any
penalty not provided by this subchapter if such penalty is a
penalty for which a civil or criminal action is prescribed as
the method of collection or has been consistently treated by
the Secretary before the date of the enactment of this
paragraph as such a penalty.''.
(b) Notice Requirement for Certain Penalties.--
(1) In general.--Subchapter C of chapter 68 of the Internal
Revenue Code of 1986 is amended by adding at the end the
following new section:
``SEC. 6752. PRELIMINARY NOTICE AND RIGHT OF REVIEW FOR COVERED
PENALTIES.
``(a) Notice.--
``(1) In general.--No covered penalty shall be assessed
unless the Secretary provides a notice to the taxpayer in
writing by mail to an address as determined under section
6212(b) that contains the following information:
``(A) The covered penalty proposed to be assessed.
``(B) The taxable years or periods involved.
``(C) The basis for the proposed penalty.
``(D) Information about the right of the taxpayer
to request review as provided in subsection (b).
``(2) Timing of notice.--The mailing of the notice
described in paragraph (1) shall precede any notice and demand
of any covered penalty by at least 60 days (120 days in the
case of a notice addressed to a taxpayer outside the United
States).
``(b) Right to a Review.--Within 60 days (120 days in the case of a
notice sent to a taxpayer outside the United States) of the mailing of
the notice described in subsection (a), the taxpayer may request a
review of the proposed penalty by the Internal Revenue Service
Independent Office of Appeals.
``(c) Suspension of Assessment and Collection.--
``(1) In general.--A covered penalty may not be assessed,
demanded, or collected before--
``(A) the expiration of the period provided under
subsection (b), or
``(B) in any case in which the taxpayer requests a
review under subsection (b), the date a final
determination is issued in such review.
``(2) Statute of limitations.--If a notice described in
subsection (a) with respect to any covered penalty is mailed
before the expiration of the period provided by section 6501
for the assessment of such penalty (determined without regard
to this paragraph), the running of such period shall be
suspended for the period during which assessment is prohibited
under this section and for 30 days thereafter.
``(d) Covered Penalty.--For purposes of this section, the term
`covered penalty' means any penalty imposed under section 6038(b)(1),
6038A(d)(1), 6038B(c), 6038C(c), 6038D(d)(1), 6039F(c)(1)(B), or 6677.
``(e) Exception for Jeopardy.--This subsection shall not apply if
the Secretary finds that the collection of the penalty is in jeopardy.
``(f) Regulations.--The Secretary shall prescribe such regulations
or other guidance as may be necessary or appropriate to carry out this
section, including regulations or other guidance relating to--
``(1) procedures for issuing notices under subsection (a),
``(2) the time and manner for presenting appropriate
defenses under subsection (b)(2), and
``(3) establishing simplified reviews for cases in which
the penalty amount at issue does not exceed a designated dollar
threshold.''.
(2) Clerical amendment.--The table of sections for
subchapter C of chapter 68 of such Code is amended by adding at
the end the following new item:
``Sec. 6752. Preliminary notice and right of review for covered
penalties.''.
(c) Interpretive Rules.--
(1) Taxpayer rights.--Nothing in the amendments made by
this section shall be construed to create any limitation on the
rights of a taxpayer--
(A) under subchapter C or D of chapter 64 of the
Internal Revenue Code of 1986, or
(B) to pursue refund litigation with respect to the
assessment or imposition of any penalty imposed under
such Code.
(2) No inference.--Nothing in the amendments made by this
section shall be construed to create any inference with respect
to the treatment of any covered penalty (as defined in section
6752 of the Internal Revenue Code of 1986, as added by this
section) before the date of the enactment of this Act.
SEC. 3. REPEAL OF DUE DATE REQUIREMENTS FOR CERTAIN INFORMATION RETURNS
RELATING TO FOREIGN TRUSTS.
(a) In General.--Section 2006(b) of the Surface Transportation and
Veterans Health Care Choice Improvement Act of 2015 is amended by
striking paragraphs (9) and (10).
(b) Effective Date.--The amendment made by this section shall apply
to returns for taxable years beginning after December 31, 2026.
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