Enhanced Taxpayer Rights: Protecting Refunds During IRS Collection Disputes.
This law strengthens citizens' rights when disputing tax debts with the IRS. It pauses the deadline for filing a refund claim if the debt is actively being challenged in a collection hearing. Crucially, the IRS cannot automatically seize a taxpayer's overpayment (refund) to cover a disputed debt without the taxpayer's consent.
Key points
The time limit for filing a tax refund claim is suspended while the underlying tax debt is actively disputed during collection proceedings.
The IRS is prohibited from automatically using tax overpayments to offset a disputed tax liability without the taxpayer's permission.
The Tax Court gains expanded power to review both the IRS collection procedure and the validity of the original disputed tax bill.
Status:
Placed on Calendar
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