Overview
Title
To amend the Internal Revenue Code of 1986 to include equitable tolling for negligence or malfeasance by the Internal Revenue Service for the period of limitation on filing for a credit or refund of overpayment.
ELI5 AI
H. R. 7995 wants to give people more time to ask for their extra tax money back if the IRS made a mistake that stopped them from asking on time. It would help people when the IRS is slow or messes up, so they don't miss out on getting a refund.
Summary AI
H. R. 7995 proposes changes to the Internal Revenue Code of 1986 to allow for more leeway in the time taxpayers have to file for refunds or credits when they have overpaid their taxes. Specifically, the bill introduces "equitable tolling" in situations where taxpayer action is hindered due to negligence or misconduct by the IRS. This means that if the IRS' mistakes or irresponsible behavior prevents someone from filing necessary documents on time, the deadline for them to claim a refund or credit would be extended. The act will be called the "Protecting the American Taxpayer from IRS Mishandling Act of 2024."
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AnalysisAI
Summary of the Bill
The bill titled "Protecting the American Taxpayer from IRS Mishandling Act of 2024" aims to amend the Internal Revenue Code of 1986. It introduces provisions for equitable tolling, specifically when negligence or malfeasance by the Internal Revenue Service (IRS) affects the period of limitation on filing for a credit or refund of an overpayment. Essentially, this bill seeks to allow taxpayers more time to claim a refund if mistakes or negligence by the IRS have delayed their ability to meet filing deadlines.
Summary of Significant Issues
A notable issue with the proposed bill is the lack of a clear mechanism or criteria for taxpayers to prove IRS negligence or malfeasance. The absence of specific guidelines may lead to inconsistent application and difficulties in enforcing this provision. Terms like "malfeasance" and the idea of being "unable to file necessary documents or otherwise meet a deadline" due to IRS actions are somewhat vague. This ambiguity might create confusion or disputes over what qualifies as negligence significant enough to warrant a deadline extension.
Additionally, the bill does not provide information on potential financial impacts, such as effects on federal revenue or taxpayer savings, which makes it challenging to predict economic consequences.
Potential Public Impact
The bill could broadly benefit taxpayers by potentially making it easier to recoup overpaid taxes when IRS errors or delays occur. By extending the period during which individuals can file for refunds beyond the standard limitations, it acknowledges the sometimes-complicated nature of tax filing and the possibility of governmental mishandling. This extension could relieve stress for taxpayers who are facing difficulties due to IRS negligence.
However, without a clearly defined process for establishing IRS negligence, there could also be a downside to the bill’s implementation. Taxpayers may face issues in proving the required negligence, leading to increased administrative burdens and potential legal challenges. This could result in additional delays and costs for both taxpayers and the IRS.
Stakeholder Impacts
For taxpayers, particularly those who have faced challenges due to errors by the IRS, this bill could be a significant positive development. It recognizes the reality that administrative errors can interfere with their financial timeframes and provides a pathway to address these issues.
Conversely, for the IRS, this legislation could create increased scrutiny and the potential for additional administrative work. The vagueness in the language might necessitate developing new procedures and training for IRS employees to handle claims of negligence or malfeasance, potentially stretching already limited resources.
Legal professionals and tax advisors may also find new opportunities to assist taxpayers in navigating the complexities of proving IRS negligence, although this might also mean an influx of cases and additional advocacy work.
In summary, while the bill primarily aims to protect taxpayers, its effectiveness could be compromised by the lack of specific guidance on implementing its provisions. As such, while it might offer relief to some, it also poses challenges that could influence its impact and efficacy.
Issues
The bill lacks a clear mechanism for individuals to prove negligence or malfeasance by the Internal Revenue Service, which could lead to inconsistencies or difficulties in application. This absence can significantly impact its enforceability and effectiveness. (Section 2)
The term 'malfeasance of the Internal Revenue Service' is vague and could lead to varying interpretations without further clarification or established criteria, potentially creating loopholes or uneven application. (Section 2)
The purpose and scope of the Act are not clearly defined beyond the title. This ambiguity may lead to misunderstandings about its objectives, reducing legislative clarity and transparency. (Section 1)
The language 'unable to file necessary documents or otherwise meet a deadline' is ambiguous, lacking specificity on what constitutes inability or qualifying negligence for an extension, which might lead to disputes or inequitable outcomes. (Section 2)
There is no information on the potential financial impacts or effects on federal revenue, making it difficult to assess potential financial consequences or identify areas for waste reduction. (Section 1)
Sections
Sections are presented as they are annotated in the original legislative text. Any missing headers, numbers, or non-consecutive order is due to the original text.
1. Short title Read Opens in new tab
Summary AI
This section gives the official name of the law, which is the “Protecting the American Taxpayer from IRS Mishandling Act of 2024.”
2. Extending the running of periods of limitation for filing for credit or refund of overpayment to include malfeasance or negligence by the Internal Revenue Service Read Opens in new tab
Summary AI
Section 2 of the bill proposes changes to the IRS rules about time limits for requesting a tax refund. It allows taxpayers more time to claim a refund if the IRS's mistakes or negligence prevent them from filing on time.