SenateS. 5477119th Congress
Federal Receivership Fairness Act
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[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 5477 Introduced in Senate (IS)]
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119th CONGRESS
2d Session
S. 5477
To amend the Internal Revenue Code of 1986 to provide for certain rules
regarding determination of tax in the case of a receivership.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
September 23, 2026
Mr. Young (for himself and Mr. Warner) 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 provide for certain rules
regarding determination of tax in the case of a receivership.
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 ``Federal Receivership Fairness Act''.
SEC. 2. DETERMINATION OF TAX LIABILITY OF RECEIVERSHIP ESTATE.
(a) In General.--Subchapter B of chapter 70 of the Internal Revenue
Code of 1986 is amended by adding at the end the following new section:
``SEC. 6874. DETERMINATION OF FEDERAL TAX LIABILITY BY COURTS.
``(a) In General.--Except as provided in subsection (b), the court
appointing a receiver in any receivership proceeding before any court
of the United States may determine the amount or legality of any
Federal tax, any fine or penalty relating to such a tax, or any
addition to such tax, whether or not previously assessed, whether or
not paid, and whether or not contested before and adjudicated by a
judicial or administrative tribunal of competent jurisdiction.
``(b) Exceptions.--The court described in subsection (a) shall not
determine--
``(1) the amount or legality of any Federal tax, fine,
penalty, or addition to tax if such amount or legality was
contested before and adjudicated by a judicial or
administrative tribunal of competent jurisdiction before the
commencement of the receivership,
``(2) any right of the receivership estate to a Federal tax
refund, before the earlier of--
``(A) 120 days after the receiver properly requests
such refund, or
``(B) a determination by the Secretary of such
request, or
``(3) the amount or legality of any amount arising in
connection with an ad valorem tax on real or personal property
of the receivership estate, if the applicable period for
contesting or redetermining that amount under any otherwise
applicable law has expired.
``(c) Request for Determination.--
``(1) Provision of address, etc.--The clerk of the court
described in subsection (a) shall maintain records under which
the Secretary may--
``(A) designate an address for service of requests
under paragraph (2), and
``(B) describe where further information concerning
additional requirements for filing such requests may be
found.
If the Secretary does not designate an address and provide such
address to the clerk under subparagraph (A), any request made
under paragraph (2) may be served at the address for the filing
of a tax return or protest with respect to Federal taxes.
``(2) Request for determination.--A receiver may request a
determination of any unpaid liability of the receivership
estate for any tax incurred before or during the administration
of the case by submitting a tax return for such tax and a
request for such a determination at the address and in the
manner designated in paragraph (1). Unless such return is
fraudulent, or contains a material misrepresentation, the
receivership estate, the receiver, the entity or individual in
receivership, and any successor to such entity or individual
are all discharged from any liability for such tax--
``(A) upon payment of the tax shown on such return,
if--
``(i) the Secretary does not notify the
receiver, within 60 days after such request,
that such return has been selected for
examination, or
``(ii) the Secretary does not complete such
an examination and notify the receiver of any
tax due within 180 days after such request or
within such additional time as the court, for
cause, permits,
``(B) upon payment of the tax determined by the
court, after notice and a hearing, after completion by
the Secretary of such examination; or
``(C) upon payment of the tax determined by the
Secretary to be due.
``(d) Assessment.--After determination by the court of a tax under
this section, the Secretary may assess such tax against the
receivership estate, the individual or entity in receivership, any
successor to such individual or entity, or any entity arising out of
the receivership, as the case may be, subject to any otherwise
applicable law.
``(e) Receiver.--For purposes of this section--
``(1) In general.--Except as provided in paragraph (2), the
term `receiver' means any person or entity appointed or
recognized as a receiver in any action or proceeding by order
of a Federal or State court.
``(2) Exceptions.--The term `receiver' does not include--
``(A) a bankruptcy trustee appointed in a
bankruptcy case under title 11, United States Code, or
``(B) an executor of a decedent's estate whose
rights and responsibilities as to Federal tax matters
are set forth in or governed by other Federal or State
law.
``(f) Waiver of Sovereign Immunity.--
``(1) In general.--Notwithstanding an assertion of
sovereign immunity, sovereign immunity is abrogated as to the
Secretary to the extent set forth in this subsection with
respect to all matters in subsections (a) through (e).
``(2) Jurisdiction of court.--The court described in
subsection (a) may hear and determine any issue arising with
respect to the application of this section to the Secretary,
and may issue against the Secretary an order, process, or
judgment under this section or under the Federal Rules of Civil
Procedure, including an order or judgment awarding a money
recovery, but not including an award of punitive damages. Such
order or judgment for costs or fees under this section or the
Federal Rules of Civil Procedure against the Secretary shall be
consistent with the provisions and limitations of section
2412(d)(2)(A) of title 28, United States Code.
``(3) Enforcement.--The enforcement of any such order,
process, or judgment against the Secretary shall be consistent
with appropriate law applicable to the Secretary and, in the
case of a money judgment against the United States, shall be
paid as if it is a judgment rendered by a district court of the
United States or any State court.
``(4) Coordination with applicable law.--Nothing in this
section shall create any substantive claim for relief or cause
of action not otherwise existing under the Federal Rules of
Civil Procedure or other applicable law.
``(5) Deemed waiver.--If the Secretary asserts a claim in
any receivership case, the Secretary is deemed to have waived
sovereign immunity with respect to a claim against the
Secretary which is property of the receivership estate therein
and which arose out of the same transaction or occurrence out
of which the claim of the Secretary arose.
``(6) Offset of claims.--Notwithstanding any assertion of
sovereign immunity by the Secretary, there shall be offset
against a claim or interest of the Secretary any claim against
the Secretary which is property of the receivership estate.
``(g) Grant of Jurisdiction to Federal Court.--In any receivership
proceeding in a court of any State or the District of Columbia, the
determination of any Federal tax shall be adjudicated by the United
States District Court for the district in which such proceeding is
pending, and shall not be determined or adjudicated by any such court
of such State or the District of Columbia.''.
(b) Clerical Amendment.--The table of sections for subchapter B of
chapter 70 of the Internal Revenue Code of 1986 is amended by adding at
the end the following item:
``Sec. 6874. Determination of tax liability by courts.''.
(c) Conforming Amendments.--
(1) Section 2201(a) of title 28, United States Code, is
amended by inserting ``, a proceeding under section 6874 of
such Code'' after ``the Internal Revenue Code of 1986''.
(2) Section 3713(a)(2) of title 31, United States Code, is
amended by inserting ``, or to any receivership case or
proceeding or any receivership estate governed by section 6874
of the Internal Revenue Code of 1986'' after ``title 11''.
(3) Section 3713(b) of title 31, United States Code, is
amended--
(A) by striking ``(except a trustee acting under
title 11)'',
(B) by striking ``(b)'' and inserting ``(b)(1)'',
and
(C) by adding at the end the following new
paragraph:
``(2) Paragraph (1) shall not apply to--
``(A) a trustee acting under title 11; or
``(B) any receiver, as defined in section 6874(e)(1) of the
Internal Revenue Code of 1986, exercising the rights afforded
to receivers by such section 6874.''.
(d) Effective Date.--The amendments made by this section shall
apply to returns for which the period during which an assessment of tax
or an amendment or review or audit of the return is open as of the date
of the enactment of this Act, and to returns filed on or after such
date of enactment.
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