H.R. 6506

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6506 Referred in Senate (RFS)]

<DOC>
119th CONGRESS
2d Session
H. R. 6506

_______________________________________________________________________

IN THE SENATE OF THE UNITED STATES

May 20, 2026

Received; read twice and referred to the Committee on Finance

_______________________________________________________________________

AN ACT

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.

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 ``Taxpayer Due Process Enhancement 
Act''.

SEC. 2. SUSPENSION OF PERIOD OF LIMITATIONS ON FILING A CLAIM FOR 
CREDIT OR REFUND DURING COLLECTION ACTION PROCEEDINGS.

(a) In General.--Section 6330(e)(1) of the Internal Revenue Code of 
1986 is amended by inserting ``subsection (a), (b), or (c) of section 
6511 (relating to limitations on credit or refund),'' after ``section 
6502 (relating to collection after assessment),''.
(b) Period of Limitations on Filing a Claim for Credit or Refund.--
Section 6330(e) of such Code is amended by adding at the end the 
following new paragraph:
``(3) Period of limitations on filing a claim for credit or 
refund.--In the case of the running of any period of 
limitations under subsection (a), (b), or (c) of section 6511 
with respect to the filing of any claim for credit or refund, 
paragraph (1)--
``(A) shall apply only to the extent that such 
credit or refund relates to an underlying tax liability 
properly disputed at the hearing requested under this 
section, and
``(B) shall not result in a suspension of the 
running of such period of limitations after any date on 
which a lapse of a deadline, a court filing, or a court 
order establishes that the taxpayer has forfeited or 
otherwise lost the right to pursue such dispute.''.
(c) Cross Reference.--Section 6511(i) of such Code is amended by 
adding at the end the following new paragraph:
``(8) For limitations in case of collection action 
proceedings, see section 6330(e).''.
(d) Effective Date.--The amendments made by this section shall 
apply to the running of any period of limitations if such period 
(determined without regard to the amendments made by this section) ends 
on or after the date of the enactment of this Act.

SEC. 3. PROHIBITION ON CREDITING OF OVERPAYMENTS AGAINST DISPUTED TAX 
LIABILITY DURING COLLECTION ACTION PROCEEDINGS.

(a) In General.--Section 6402 of the Internal Revenue Code of 1986 
is amended by adding at the end the following new subsection:
``(o) Prohibition on Crediting of Overpayments Against Disputed Tax 
Liability During Collection Action Proceedings.--If a hearing is 
properly requested under section 6320(a)(3)(B) or 6330(a)(3)(B), and an 
underlying tax liability referred to in section 6330(c)(2)(B) is 
properly disputed at such hearing, such tax liability shall not, except 
with the consent of the taxpayer, be taken into account under 
subsection (a) for the period during which the period of limitations 
for filing a claim for credit or refund relating to such tax liability 
is suspended by reason of section 6330(e).''.
(b) Clarification of Application of Certain Levy Hearing Rules to 
Lien Hearings.--Section 6330(c)(2)(A) of such Code is amended by 
striking ``unpaid tax or the proposed levy'' and inserting ``unpaid 
tax, collection action, or proposed collection action''.
(c) Effective Dates.--
(1) In general.--The amendment made by subsection (a) shall 
apply with respect to any period described in section 6402(o) 
of the Internal Revenue Code of 1986 (as added by this section) 
if any portion of such period is after the date of the 
enactment of this Act.
(2) Clarification of application of certain levy hearing 
rules to lien hearings.--The amendment made by subsection (b) 
shall take effect on the date of the enactment of this Act.

SEC. 4. EXPANSION OF JURISDICTION OF TAX COURT.

(a) In General.--Section 6330(d)(1) of the Internal Revenue Code of 
1986 is amended to read as follows:
``(1) Petition for review by tax court.--
``(A) In general.--In the case of a determination 
under this section, the person may, within 30 days of 
such determination, petition the Tax Court for review 
of--
``(i) such determination, and
``(ii) any underlying tax liability 
referred to in subsection (c)(2)(B) which is 
properly disputed at the hearing in which such 
determination is made.
``(B) Jurisdiction of tax court.--Upon the filing 
of a petition, the Tax Court shall have jurisdiction 
with respect to--
``(i) the determination referred to in 
subparagraph (A)(i),
``(ii) any underlying tax liability 
referred to in subparagraph (A)(ii), and
``(iii) any equitable tolling of the 30-day 
deadline referred to in subparagraph (A).
``(C) Retention of jurisdiction.--Upon a 
determination being made under this section, 
subparagraphs (A) and (B) shall apply whether or not 
the Secretary abandons the collection action or 
proposed collection action at issue in such 
determination.''.
(b) Effective Date.--The amendment made by this section shall apply 
with respect to petitions filed after the date of the enactment of this 
Act.

Passed the House of Representatives May 19, 2026.

Attest:

KEVIN F. MCCUMBER,

Clerk.