S. 5142Senate119th Congress (2025-2027)In Committee

A bill to amend the Internal Revenue Code of 1986 to improve the process for providing refunds to taxpayers.

AI-Generated Summary

Updated August 1, 2026 at 3:41 AM UTC

The bill changes the tax code to make it easier for certain taxpayers to get refunds. It requires the Treasury to issue a refund—up to the amount of a refundable credit—rather than using that money to offset other debts for taxpayers who have been deemed currently not collectible. The changes apply to refunds processed after a one‑year waiting period.

Key Provisions

Adds a new rule that, for taxpayers who have a refundable credit under section 32 and who have been classified by the IRS as “currently not collectible,” the IRS must refund any overpayment up to the amount of that credit, instead of automatically offsetting it against other debts.
Defines “applicable taxpayer” as someone the IRS has already determined is currently not collectible under section 6343(e).
Sets the new rule to take effect for refunds processed more than 12 months after the bill becomes law.

Legislative Activity

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1 earlier action

SenateIntro Referral Latest Action

Read twice and referred to the Committee on Finance.

Finance Committee

July 28, 2026

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SenateIntro Referral

Introduced in Senate

July 28, 2026

SenateIntro Referral

Read twice and referred to the Committee on Finance.

Finance Committee

July 28, 2026

Bill Text

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Introduced in SenateIssued July 28, 2026

119th CONGRESS

2d Session

S. 5142

IN THE SENATE OF THE UNITED STATES

July 28, 2026

Mr. Bennet (for himself and Mr. Cassidy) 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 improve the process for providing refunds to taxpayers.

Automation of refund offset bypass

(a)

In general

Section 6402(a) of the Internal Revenue Code of 1986 is amended—

(1)

by striking In the case and inserting the following:

(1)

Authority

Except as provided in paragraph (2), in the case

, and

(2)

by adding at the end the following new paragraphs:

(2)

Special rule for certain individuals

In the case of an overpayment with respect to any taxable year for which a credit is allowed to an applicable taxpayer under section 32, the Secretary shall, subject to subsections (c), (d), (e), and (f), refund such overpayment in an amount not to exceed the amount of the credit allowed under such section for such taxable year.

(3)

Applicable taxpayer

For purposes of paragraph (2), the term applicable taxpayer means a taxpayer who was classified by the Secretary as currently not collectible (within the meaning of section 6343(e)) prior to the date on which the refund was requested by the taxpayer.

(b)

Effective date

The amendments made by this section shall apply to offsets made after the date which is 12 months after the date of enactment of this Act.