This bill improves how the IRS notifies taxpayers and handles disputes when it imposes multi-year bans on claiming certain tax credits. The affected credits are the Child Tax Credit, American Opportunity Tax Credit, and Earned Income Tax Credit. Under the legislation, the IRS must provide clearer written notice explaining which credits are being denied, why they are being denied, and how long the ban will last. The bill also gives the Tax Court authority to review whether the IRS properly imposed these multi-year bans, and establishes new procedures allowing taxpayers to challenge previous bans that were issued without proper explanation. Most provisions take effect 36 months after enactment, with some applying immediately to cases pending in Tax Court, ensuring taxpayers have better protection and clearer review procedures when facing credit disallowances.
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