Bennet Introduces Legislation to Improve the Taxpayer Experience and Reform IRS Procedure

About About Michael Legislation News Press Releases Social Media Newsletter Archive Services Priorities Top Issues Child Tax Credit Investing in Colorado Contact Map Español Acerca de Michael Escribe a Michael Prioridades Servicios Visitando D.C. Bennet Introduces Legislation to Improve the Taxpayer Experience and Reform IRS Procedure Legislation reduces burdens for low-income filers, sets out important procedural requirements for multi-year bans, and adjusts the penalty approval process Washington, D.C. — Colorado U.S. Senator Michael Bennet, a senior member of the Senate Finance Committee, introduced three pieces of legislation to provide taxpayers with greater certainty and flexibility when dealing with the IRS and […] Jul 28, 2026 | Press Releases Legislation reduces burdens for low-income filers, sets out important procedural requirements for multi-year bans, and adjusts the penalty approval process Washington, D.C. — Colorado U.S. Senator Michael Bennet, a senior member of the Senate Finance Committee, introduced three pieces of legislation to provide taxpayers with greater certainty and flexibility when dealing with the IRS and the tax filing process. The legislation would eliminate installment fees for low-income taxpayers; require the Internal Revenue Service (IRS) to explain multi-year bans for the Earned Income Tax Credit (EITC), the Child Tax Credit (CTC), or the American Opportunity Tax Credit (AOTC) in a notice of deficiency; and ensure that IRS penalties are sent only after written approval has been received from a supervisor. “Too many taxpayers struggle to understand why the IRS has made a determination on their taxes, or are unable to appeal when they believe a decision has been made in error,” said Bennet . “Colorado workers and families deserve an IRS that is transparent and accountable, without added fees on top for individuals just looking to pay what they owe.” More detail on each piece of legislation can be found below: Installment Agreement Fees Eliminated for Certain Individuals Taxpayers who cannot pay their federal tax liabilities in full may enter into installment agreements with the IRS, but the fees for establishing those agreements can create an additional burden for lower-income taxpayers and discourage taxpayers from paying at all. This legislation would waive installment agreement fees for any taxpayer whose adjusted gross income, based on the most recent year for which that information is available, does not exceed 250 percent of the applicable poverty level, as determined by the Secretary. The text of the bill is available HERE . Notice and Review with Respect to Multi-Year Bans on Claiming Credits If the IRS determines that a taxpayer improperly claimed the EITC, CTC, or AOTC, in certain circumstances, the taxpayer may be disallowed (i.e., banned) from claiming these credits for either two or 10 years. This remains the case even if the taxpayer otherwise meets the eligibility requirements in those future years. Given the potential effect of these bans, it is critical that they are clearly described in notices of deficiency and subject to judicial review. Under current law, however, there is no requirement for the IRS to explain the ban in any written notice, and it is not clear if or when the Tax Court has jurisdiction to review bans. Although they operate like penalties for which the IRS has the burden of production, it is unclear if the IRS has the burden of production for 2- year bans, or the burden of proof for 10-year bans, which require fraud. The legislation requires the IRS to explain a ban in a notice of deficiency, provides that the Tax Court can determine and redetermine bans in connection with its review of a deficiency in the year the ban is imposed or proposed by the IRS, and clarifies that the IRS has the burden of production for 2-year bans and the burden of proof for 10-year bans in any such proceeding. The text of the bill is available HERE . Modification of Procedural Requirements for Penalties and Disallowance Periods Some penalties require supervisory approval, but current law leaves the timing of the required approval unclear. There have also been disputes over who is an individual’s supervisor. In addition, although IRS procedures require supervisory approval of multi-year bans on claiming the EITC, CTC, and AOTC, these approval procedures are not always followed. The legislation clarifies that written approval is required by either a supervisor or the Office of Servicewide Penalties before the IRS sends the taxpayer a notice of penalty for penalties that may be appealed, and extends the approval requirement to multi-year bans. The legislation also requires the IRS to issue an annual report on penalties. The text of the bill is available HERE . ### Contact Info 261 Russell Senate Building Washington, DC 20510 Phone: 202-224-5852 Fax: 202-228-5097 View State Offices Resources Write to Michael Get Help with a Federal Agency Visiting DC Investing in