S. 4881Senate119th Congress (2025-2027)In Committee

Unlocking Low-Income Taxpayer Clinic Funding Act

AI-Generated Summary

Updated July 7, 2026 at 4:53 AM UTC

The Unlocking Low-Income Taxpayer Clinic Funding Act changes how low‑income taxpayer clinics must provide matching funds for federal grants. It expands what counts as matching funds to include staff salaries and equipment costs, while excluding overhead expenses. The bill also allows the Treasury Secretary to set the required match at less than 100% (but no lower than 25%) if it would help more taxpayers receive services. The changes take effect for grant years after the law is passed.

Key Provisions

Defines matching funds to include clinic staff salaries (with benefits) and equipment costs, but not indirect overhead expenses.
Sets the default matching‑fund requirement at 100% of the grant amount, with the Secretary able to lower it to as low as 25% to broaden clinic coverage.
Rearranges and renumbers the existing sections of the Internal Revenue Code that govern these grants.
Applies the new rules to calendar years beginning after the law’s enactment.

Legislative Activity

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1 earlier action

SenateIntro Referral Latest Action

Read twice and referred to the Committee on Finance.

Finance Committee

June 24, 2026

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SenateIntro Referral

Introduced in Senate

June 24, 2026

SenateIntro Referral

Read twice and referred to the Committee on Finance.

Finance Committee

June 24, 2026

Bill Text

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Introduced in SenateIssued June 24, 2026

119th CONGRESS

2d Session

S. 4881

IN THE SENATE OF THE UNITED STATES

June 24, 2026

Mr. Welch (for himself and Mr. Marshall) 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 modify the matching funds requirement for grants provided to low-income taxpayer clinics.

Short title

This Act may be cited as the Unlocking Low-Income Taxpayer Clinic Funding Act.

Low-income taxpayer clinic funding unlocked

(a)

Matching funds

Paragraph (5) of section 7526(c) of the Internal Revenue Code of 1986 is amended to read as follows:

(5)

Requirement of matching funds

(A)

In general

With respect to any grant provided to a low-income taxpayer clinic under this section, such clinic shall provide matching funds equal to the applicable percentage of the amount of such grant.

(B)

Matching funds

(i)

In general

For purposes of this paragraph, the term matching funds may include—

(I)

the salary (including fringe benefits) of individuals performing services for the low-income taxpayer clinic, and

(II)

the cost of equipment used in the low-income taxpayer clinic.

(ii)

Exclusion

For purposes of this paragraph, the term matching funds shall not include any indirect expenses, such as general overhead of the institution sponsoring the low-income taxpayer clinic.

(C)

Applicable percentage

For purposes of subparagraph (A), the applicable percentage shall be 100 percent, except that the Secretary may establish a lower percentage (not below 25 percent) if the Secretary determines that such percentage would expand the coverage of the low-income taxpayer clinic to additional taxpayers.

(b)

Technical amendments

Section 7526(c) of the Internal Revenue Code of 1986, as amended by subsection (a), is further amended—

(1)

by striking paragraphs (1) and (2), and

(2)

by redesignating paragraphs (3) through (6) as paragraphs (1) through (4).

(c)

Effective date

The amendments made by this section shall apply to calendar years beginning after the date of enactment of this Act.