S. 2358, the IRS Accountability and Taxpayer Protection Act, would require the Internal Revenue Service to obtain written approval from a supervisor before assessing any penalty against a taxpayer or enforcing certain tax credit disallowance periods. This approval must occur before the IRS notifies the taxpayer of the penalty or disallowance, and the bill defines "initial determination" to clarify that routine requests or inquiries do not trigger this requirement unless they offer a specific penalty amount or disallowance period. The legislation affects all taxpayers subject to IRS penalties and specifically targets earned income tax credit, child tax credit, and American opportunity tax credit enforcement. The bill requires the Treasury Department to publish a detailed annual report within 24 months of enactment documenting all penalties assessed by the IRS, including data broken down by IRS organizational unit and the progression of penalties through the determination and review process. The changes take effect for notices sent after the bill becomes law, with no new funding required.
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