H.R. 5146

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5146 Introduced in House (IH)]

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119th CONGRESS
1st Session
H. R. 5146

To amend the Internal Revenue Code of 1986 to provide for certain rules 
regarding determination of tax in the case of a receivership.

_______________________________________________________________________

IN THE HOUSE OF REPRESENTATIVES

September 4, 2025

Mr. LaHood (for himself and Mr. Beyer) introduced the following bill; 
which was referred to the Committee on Ways and Means, and in addition 
to the Committee on the Judiciary, for a period to be subsequently 
determined by the Speaker, in each case for consideration of such 
provisions as fall within the jurisdiction of the committee concerned

_______________________________________________________________________

A BILL

To amend the Internal Revenue Code of 1986 to provide for certain rules 
regarding determination of tax in the case of a receivership.

Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Federal Receivership Fairness Act''.

SEC. 2. DETERMINATION OF TAX LIABILITY OF RECEIVERSHIP ESTATE.

(a) In General.--Subchapter B of chapter 70 of the Internal Revenue 
Code of 1986 is amended by adding at the end the following new section:

``SEC. 6874. DETERMINATION OF TAX LIABILITY BY COURTS.

``(a) In General.--Except as provided in subsection (b), the court 
appointing a receiver in any receivership proceeding before any court 
of the United States or of any State or the District of Columbia may 
determine the amount or legality of any Federal tax, any fine or 
penalty relating to such a tax, or any addition to such tax, whether or 
not previously assessed, whether or not paid, and whether or not 
contested before and adjudicated by a judicial or administrative 
tribunal of competent jurisdiction.
``(b) Exceptions.--The court described in subsection (a) shall not 
determine--
``(1) the amount or legality of any Federal tax, fine, 
penalty, or addition to tax if such amount or legality was 
contested before and adjudicated by a judicial or 
administrative tribunal of competent jurisdiction before the 
commencement of the receivership,
``(2) any right of the estate to a Federal tax refund, 
before the earlier of--
``(A) 120 days after the receiver properly requests 
such refund, or
``(B) a determination by the appropriate 
governmental unit of such request, or
``(3) the amount or legality of any amount arising in 
connection with an ad valorem tax on real or personal property 
of the receivership estate, if the applicable period for 
contesting or redetermining that amount under any otherwise 
applicable law has expired.
``(c) Request for Determination.--
``(1) Provision of address, etc.--The clerk of the court 
described in subsection (a) shall maintain records under which 
the appropriate governmental unit may--
``(A) designate an address for service of requests 
under paragraph (2), and
``(B) describe where further information concerning 
additional requirements for filing such requests may be 
found.
If the appropriate governmental unit does not designate an 
address and provide such address to the clerk under 
subparagraph (A), any request made under paragraph (2) may be 
served at the address for the filing of a tax return or protest 
with respect to Federal taxes.
``(2) Request for determination.--A receiver may request a 
determination of any unpaid liability of the estate for any tax 
incurred before or during the administration of the case by 
submitting a tax return for such tax and a request for such a 
determination at the address and in the manner designated in 
paragraph (1). Unless such return is fraudulent, or contains a 
material misrepresentation, the estate, the receiver, the 
individual or entity in receivership, and any successor to such 
individual or entity are all discharged from any liability for 
such tax--
``(A) upon payment of the tax shown on such return, 
if--
``(i) the appropriate governmental unit 
does not notify the receiver, within 60 days 
after such request, that such return has been 
selected for examination, or
``(ii) the appropriate governmental unit 
does not complete such an examination and 
notify the receiver of any tax due within 180 
days after such request or within such 
additional time as the court, for cause, 
permits,
``(B) upon payment of the tax determined by the 
court, after notice and a hearing, after completion by 
the appropriate governmental unit of such examination; 
or
``(C) upon payment of the tax determined by the 
appropriate governmental unit to be due.
``(d) Assessment.--After determination by the court of a tax under 
this section, the appropriate governmental unit may assess such tax 
against the estate, the individual or entity in receivership, any 
successor to such individual or entity, or any entity arising out of 
the receivership, as the case may be, subject to any otherwise 
applicable law.
``(e) Definitions.--For purposes of this section--
``(1) Receiver.--
``(A) In general.--Except as provided in 
subparagraph (B), the term `receiver' means any person 
or entity appointed or recognized as a receiver in any 
action or proceeding by order of a Federal or State 
court.
``(B) Exceptions.--The term `receiver' does not 
include--
``(i) a bankruptcy trustee appointed in a 
bankruptcy case under title 11, United States 
Code, or
``(ii) an executor of a decedent's estate 
whose rights and responsibilities as to Federal 
tax matters are set forth in or governed by 
other Federal or State law.
``(2) Appropriate governmental unit.--The term `appropriate 
governmental unit' means a Federal, State, or local 
governmental unit responsible for the collection of taxes 
within the jurisdiction of such governmental unit.
``(f) Waiver of Sovereign Immunity.--
``(1) In general.--Notwithstanding an assertion of 
sovereign immunity, sovereign immunity is abrogated as to the 
appropriate governmental unit to the extent set forth in this 
subsection with respect to the following:
``(A) All matters in subsections (a) through (e).
``(B) The court described in subsection (a) may 
hear and determine any issue arising with respect to 
the application of this section to the appropriate 
governmental unit.
``(C) The court may issue against the appropriate 
governmental unit an order, process, or judgment under 
this section or under the Federal Rules of Civil 
Procedure, including an order or judgment awarding a 
money recovery, but not including an award of punitive 
damages. Such order or judgment for costs or fees under 
this section or the Federal Rules of Civil Procedure 
against the appropriate governmental unit shall be 
consistent with the provisions and limitations of 
section 2412(d)(2)(A) of title 28, United States Code.
``(D) The enforcement of any such order, process, 
or judgment against the appropriate governmental unit 
shall be consistent with appropriate law applicable to 
the governmental unit and, in the case of a money 
judgment against the United States, shall be paid as if 
it is a judgment rendered by a district court of the 
United States or any State court.
``(E) Nothing in this section shall create any 
substantive claim for relief or cause of action not 
otherwise existing under the Federal Rules of Civil 
Procedure or other applicable law.
``(2) Deemed waiver.--If the appropriate governmental unit 
asserts a claim in any receivership case, the appropriate 
governmental unit is deemed to have waived sovereign immunity 
with respect to a claim against the appropriate governmental 
unit that is property of the receivership estate therein and 
that arose out of the same transaction or occurrence out of 
which the claim of the appropriate governmental unit arose.
``(3) Offset of claims.--Notwithstanding any assertion of 
sovereign immunity by the appropriate governmental unit, there 
shall be offset against a claim or interest of the appropriate 
governmental unit any claim against such governmental unit that 
is property of the receivership estate.
``(g) Federal Court Option.--Notwithstanding subsection (a), if the 
appropriate governmental unit objects to state court jurisdiction over 
any determination under this section, the matter may be transferred to, 
removed to, or otherwise heard by the United States District Court for 
the district in which the receivership is pending''.
(b) Clerical Amendment.--The table of sections for subchapter B of 
chapter 70 of the Internal Revenue Code of 1986 is amended by adding at 
the end the following item:

``Sec. 6874. Determination of tax liability by courts.''.
(c) Conforming Amendments.--
(1) Section 2201(a) of title 28, United States Code, is 
amended by inserting ``, a proceeding under section 6874 of 
such Code'' after ``the Internal Revenue Code of 1986''.
(2) Section 3713(a)(2) of title 31, United States Code, is 
amended by inserting ``, or to any receivership case or 
proceeding or any receivership estate governed by section 6874 
of the Internal Revenue Code of 1986'' after ``title 11''.
(3) Section 3713(b) of title 31, United States Code, is 
amended--
(A) by striking ``(except a trustee acting under 
title 11)'',
(B) by striking ``(b)'' and inserting ``(b)(1)'', 
and
(C) by adding at the end the following new 
paragraph:
``(2) Paragraph (1) shall not apply to--
``(A) a trustee acting under title 11; or
``(B) any receiver, as defined in section 6874(e)(1) of the 
Internal Revenue Code of 1986, exercising the rights afforded 
to receivers by such section 6874.''.
(d) Effective Date.--The amendments made by this section shall 
apply to returns for which the period during which an assessment of tax 
or an amendment or review or audit of the return is open as of the date 
of the enactment of this Act, and to returns filed on or after such 
date of enactment.
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