S. 5142 amends federal tax law to help certain taxpayers receive their refunds more easily. The bill specifically protects taxpayers who are classified as "currently not collectible" by the IRS—meaning they owe back taxes or debts but cannot currently pay—by allowing them to receive refunds up to the amount of their Earned Income Tax Credit without the IRS automatically seizing those refunds to pay off their existing debts. The legislation applies to taxpayers who request refunds after the IRS implements the new process, which must occur within 12 months of the law's enactment. The bill aims to improve fairness in the refund process by ensuring that low-income workers with unpaid tax obligations can still access their earned income credits. The measure was introduced by Senators Bennet and Cassidy and referred to the Senate Finance Committee.
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