To amend the Internal Revenue Code of 1986 to reform certain penalty and interest provisions.
Sponsors
Legislative Progress
Passed HouseReceived; read twice and referred to the Committee on Finance
Passed House (inferred from eh version)
Additional sponsor: Mr. Smith of Nebraska
Reported with an amendment, committed to the Committee of the …
Mr. Grothman introduced the following bill; which was referred to …
Summary
What This Bill Does
This bill tightens IRS penalty procedures by requiring supervisor approval before any penalty-related communication is sent to taxpayers. Under current law, supervisors must approve penalties before assessment, but this bill moves that requirement earlier—before any written notice about the penalty reaches the taxpayer.
Who Benefits and How
All taxpayers benefit from increased procedural protections. When the IRS proposes a penalty, a supervisor must now sign off before the taxpayer even receives the initial letter. Tax professionals and their clients gain leverage because improperly approved penalties can be challenged. Individual taxpayers facing audits get an additional check against arbitrary penalty assessments.
Who Bears the Burden and How
The IRS faces increased administrative burden with this earlier approval requirement. Supervisors must personally review penalty determinations in writing before any taxpayer communication, which may slow down enforcement processes. This applies to notices issued and penalties assessed after December 31, 2025.
Key Provisions
- Requires written supervisor approval before any penalty-related communication to taxpayers
- Covers both penalty assessments and proposals of penalties as adjustments
- Defines "immediate supervisor" as the person the IRS employee directly reports to
- Effective for notices issued and penalties assessed after December 31, 2025
- Secretary of Treasury may designate a higher-level official for approvals
Evidence Chain:
This summary is derived from the structured analysis below. See "Detailed Analysis" for per-title beneficiaries/burden bearers with clause-level evidence links.
Primary Purpose
Reforms IRS penalty procedures by requiring supervisor approval before any written communication about penalties is sent to taxpayers, and clarifies the definition of 'immediate supervisor'.
Policy Domains
Bill Structure & Actor Mappings
Who is "The Secretary" in each section?
- "the_secretary"
- → Secretary of the Treasury
Key Definitions
Terms defined in this bill
The person to whom the individual making the penalty determination reports
We use a combination of our own taxonomy and classification in addition to large language models to assess meaning and potential beneficiaries. High confidence means strong textual evidence. Always verify with the original bill text.
Learn more about our methodology