Taxpayer Due Process Enhancement Act

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, I rise in great support of H.R. 6506, the Taxpayer Due Process Enhancement Act.

Before I address this bill, I would like to take a moment to discuss the President's $1.8 billion slush fund, which was created by using money from American taxpayers, a fund based on a meritless lawsuit that will be used to pay his friends and allies. Yet, the Republican House remains silent.

Mr. Speaker, I include in the Record an amicus brief filed on Monday by me, my colleagues on the Ways and Means Committee, and the Litigation Task Force, the link which can be found at:

Https://litigationtaskforce.house.gov/sites/evo-subsites/

litigationandresponse.house.gov/files/evo-media-document/54-

1.pdf.

Mr. Speaker, the Taxpayer Due Process Enhancement Act will strengthen taxpayers' rights when the IRS uses a levy to collect unpaid taxes by making technical fixes to the Tax Court's jurisdiction.

In the IRS Restructuring and Reform Act of 1998, language was added to give taxpayers due process and an opportunity for review of IRS collection cases involving levies. However, a recent U.S. Supreme Court case has highlighted the need to revisit this section.

In this recent case, a taxpayer paid estimated taxes that were applied to her ex-husband's account instead of her own account. The IRS then proceeded to levy her property for the unpaid taxes.

She challenged this action in court, but while the case was pending, the IRS offset her later-year refund against the unpaid taxes until it eventually reached zero. At that point, the IRS sought to dismiss the case and won.

The case was then appealed to the United States Supreme Court. The Court held that the current statute limits the Tax Court's jurisdiction to only reviewing whether a levy should proceed. Since there was no longer a levy, she lost her ability to argue about the underlying taxes. Worse, she also lost her later-year refunds because of the statute of limitations being expired.

At every step of the process, Mr. Speaker, the system failed this taxpayer. Our bill will fix this problem.

First, while disputing a levied case in the Tax Court, our bill tolls the statute of limitations for filing refund claims.

Second, while the case is pending, the IRS is prohibited from using later-year refunds to offset the taxpayer's liability without the individual's consent.

Finally, this bill will give the Tax Court jurisdiction over the levy and the underlying tax liability. The bill also would allow the Tax Court to retain jurisdiction even if the IRS abandons the levy.

I thank my colleague, the gentleman from Texas (Mr. Moran), for his steadfast leadership in this area. I thank him for his generous support, and I thank both of our staff for their hard work on this bill.

We must work together to ensure that the IRS does not abuse its levy authority and that taxpayer rights are clearly defined and protected. I think it is very important that we make commonsense reforms like this, and I am happy that they are bipartisan.

Mr. Speaker, I urge my colleagues to vote ``yes'' on this bill. I reserve the balance of my time.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield myself the balance of my time for the purposes of closing.

Mr. Speaker, I thank my amazing, good friend, chair of the House Ways and Means Committee, Jason Smith, for his leadership, and Ranking Member Neal, who has always shown his support for the American people. It is an honor to sit on a committee that can come together with bipartisan legislation like this.

H.R. 6506 is a commonsense bill that will help taxpayers and the courts. The bill passed 41-0 in the Ways and Means Committee, showing bipartisan support for protecting the due process rights of taxpayers.

Mr. Speaker, I urge my colleagues on both sides of the aisle to support this bill and pass this bill into law, and I yield back the balance of my time.

Mr. Speaker, I thank the gentleman for yielding.

Mr. Speaker, hearing the comments from a lot of my colleagues here, I will repeat a quote that has been put over and over again on the news the last couple of days. It is a Ronald Reagan quote: ``I'm from the government, and I'm here to help.'' That is never going to happen.

Okay. Now I am here to support the Taxpayer Due Process Enhancement Act. It is a bipartisan bill that strengthens taxpayer protections and restores fairness to disputes with the IRS.

Prior to my time in elected office, I dealt with a law firm that did hundreds of tax returns every year. I dealt with everyday Americans as they brought their records, receipts, W-2s, 1099s, and whatever paperwork they had received from the IRS. Many were not experts, and I am talking about the people who work for the IRS, because they are frequently wrong.

Our clients were workers, retirees, small business owners, and families trying to do the right thing. I saw how easy it is for honest taxpayers to become overwhelmed with our overcomplicated tax law and, therefore, wind up confused with all of their notices and rules that seemed to change from year to year, and they sometimes did.

Those are the people I came to Congress to help, and those are the people this bill is meant to protect. They should not be at the mercy of a Federal agency that can use procedural loopholes to avoid review or pressure them into giving up a legitimate challenge.

Most taxpayers are not trying to cheat the system. They are just trying to file correctly, correct honest mistakes, and make sure they are treated

fairly. When a dispute arises, the IRS often has the advantage. It has more resources, more lawyers, and a much better understanding of the system than the average American. As I pointed out, frequently the IRS agents themselves don't know the law.

This is why due process matters. Every American deserves the right to challenge the IRS without worrying that the government will change the rules.

Unfortunately, current law allows that to happen. The IRS can effectively sidestep Tax Court review by applying refunds or disputed tax liabilities or withdrawing collection actions before the court can fully rule on the merits of the case. That is not how due process should work in this country.

This legislation protects taxpayers by preserving refund rights during disputes, preventing the IRS from taking refunds without consent, and ensuring that taxpayers receive a full review before the Tax Court. These are straightforward reforms rooted in fairness and accountability. The IRS should not be allowed to use procedural loopholes to pressure taxpayers or avoid review.

This bill is especially important for small businesses, working families, and individuals, who don't have a team of lawyers or accountants at their disposal. Americans should be able to challenge the IRS on equal footing and trust that the system will treat them fairly.

Mr. Speaker, I commend Representatives Moran and Sewell for advancing this bipartisan legislation, and I urge my colleagues to support it.

Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 6506) to amend the Internal Revenue Code of 1986 to suspend the period of limitations on filing a claim for credit or refund during collection action proceedings, to prohibit the crediting of overpayments against disputed tax liability during such proceedings, and to expand the jurisdiction of the Tax Court, as amended.

Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days to revise and extend their remarks and submit extraneous material on this bill under consideration.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, I rise in support of H.R. 6506, the Taxpayer Due Process Enhancement Act, bipartisan legislation introduced by my Ways and Means colleagues, Representatives Nathaniel Moran and Terri Sewell.

A recent Supreme Court decision will make it more difficult for American taxpayers to challenge the IRS in court when the agency seeks to impose levies over an alleged tax liability. Right now, the taxpayer can lose the opportunity to dispute the agency's actions simply by procedural technicalities.

This bill enhances taxpayer rights by making collection proceedings more taxpayer-friendly. By protecting deadlines, safeguarding refunds, and ensuring fair judicial review, these changes are all for the benefit of the taxpayer.

Mr. Speaker, as a former county judge, Representative Moran is leading the charge through this legislation to restore taxpayer rights and ensure that Americans can have their day in court. I reserve the balance of my time.

Mr. Speaker, I yield such time as he may consume to the gentleman from Texas (Mr. Moran), the sponsor of this legislation.

Mr. Speaker, I yield such time as he may consume to the gentleman from Wisconsin (Mr. Grothman).

Mr. Speaker, I yield myself the balance of my time.

Mr. Speaker, every taxpayer deserves the right to dispute IRS actions taken against them. We have a judicial system in place that exists to protect that right.

Unfortunately, as the system stands today, the IRS can circumvent taxpayer rights, abandon judicial review, and impose penalties on individuals who will have no real way to challenge what the government claims.

Due process must be protected for all Americans, particularly for those who are facing down a powerful government agency like the IRS.

Mr. Speaker, I encourage my colleagues to support this legislation, and I yield back the balance of my time.

Mr. Speaker, I rise today in support of H.R. 6506, the Taxpayer Due Process Enhancement Act, bipartisan legislation introduced alongside my colleague Congresswoman Terri Sewell to strengthen procedural protections for the American taxpayer.

This bill addresses a simple problem. Under current law, taxpayers who challenge an IRS collection action can lose important other rights and remedies simply because that process takes too long. That is not the result we want for taxpayers.

Congress has a duty to ensure that when Americans dispute a tax liability, the rules are clear, consistent, and taxpayer-friendly.

H.R. 6506 makes three important reforms to do just that.

First, it suspends the statute of limitations on refund claims while collection disputes are pending. Under current law, a taxpayer can spend years pursuing a legitimate challenge at Tax Court only to discover the clock ran out on their ability to recover an overpayment. This legislation will fix that.

Second, the bill prevents the IRS from automatically applying taxpayer overpayments against disputed liabilities during collection proceedings without the taxpayer's consent. Americans should not lose access to their own funds before receiving a full and fair review of the dispute and having that dispute settled.

Third, H.R. 6506 expands the jurisdiction of the Tax Court to ensure that taxpayers can obtain judicial review, even if the IRS later abandons the collection action. The courthouse doors should not shut out taxpayers because of procedural maneuvering and gamesmanship by the