Taxpayer Due Process Enhancement Act, HR6506 Amendment
Summary
The Taxpayer Due Process Enhancement Act, HR6506, proposes amendments to Internal Revenue Code Sections 6330, 6402, and 6511 to strengthen taxpayer rights in IRS collection proceedings. Section 2 would modify the suspension of limitations periods for refund claims during collection hearings. Section 3 would prohibit the IRS from crediting overpayments against disputed tax liabilities during collection action proceedings without taxpayer consent. Section 4 would expand Tax Court jurisdiction to review underlying tax liabilities in collection determination cases. The bill applies to taxpayers involved in IRS collection hearings and would affect how overpayments are handled during disputes.
Tax practitioners handling IRS collection matters, including CDP hearings and refund disputes, should monitor HR6506's progression. If enacted, the expansion of Tax Court jurisdiction to cover underlying liability determinations could represent a significant shift in dispute resolution strategy, potentially consolidating collection challenges with liability appeals in a single forum. The prohibition on offsetting overpayments during suspended limitations periods would require updated procedures for managing simultaneous refund claims and collection actions.
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GovPing monitors House Floor Schedule for new government & legislation regulatory changes. Every update since tracking began is archived, classified, and available as free RSS or email alerts — 34 changes logged to date.
What changed
The proposed legislation makes three substantive changes to the Internal Revenue Code. First, it clarifies and limits when the limitations period for filing refund claims is suspended during collection proceedings under section 6330, specifying that suspension ends when a court filing or order establishes the taxpayer has forfeited the right to pursue a dispute. Second, it adds new section 6402(o) prohibiting the IRS from offsetting overpayments against disputed tax liabilities during collection action proceedings without taxpayer consent. Third, it expands Tax Court jurisdiction under section 6330(d)(1) to include review of both the collection determination and any underlying tax liability properly disputed at the hearing.
Taxpayers involved in IRS collection hearings and levy/liens proceedings would gain enhanced procedural protections. Tax practitioners should monitor this legislation as it would fundamentally change how the IRS handles overpayments during active disputes and expand available remedies in Tax Court. The bill's effective date provisions apply amendments retroactively to limitations periods ending on or after enactment.
Archived snapshot
Apr 27, 2026GovPing captured this document from the original source. If the source has since changed or been removed, this is the text as it existed at that time.
N S AMENDMENT IN THEOATURE OF A CUBSTITUTE H.R. lllll TO M. S M FFERED BYRMITH OF ISSOURI
Strike all after the enacting clause and insert the following:
SECTION 1. SHORT TITLE. 1
This Act may be cited as the ''Taxpayer Due Process 2 Enhancement Act''. 3
SEC. 2. SUSPENSION OF PERIOD OF LIMITATIONS ON FIL-4 ING A CLAIM FOR CREDIT OR REFUND DUR-5 ING COLLECTION ACTION PROCEEDINGS. 6
.--Section 6330(e)(1) of the Internal 7(a) IGNENERAL Revenue Code of 1986 is amended by inserting ''sub-8 section (a), (b), or (c) of section 6511 (relating to limita-9 tions on credit or refund),'' after ''section 6502 (relating 10 to collection after assessment),''. 11 12(b) PL F CERIOD OFIMITATIONS ON ILING A LAIM .--Section 6330(e) of such Code 13RFORREDIT OREFUND is amended by adding at the end the following new para-14 graph: 15 16''(3) PERIOD OF LIMITATIONS ON FILING A .--In the case of the 17CLAIM FOR CREDIT OR REFUND running of any period of limitations under sub-18
section (a), (b), or (c) of section 6511 with respect 1 to the filing of any claim for credit or refund, para-2 graph (1)-- 3 ''(A) shall apply only to the extent that 4 such credit or refund relates to an underlying 5 tax liability properly disputed at the hearing re-6 quested under this section, and 7 ''(B) shall not result in a suspension of the 8 running of such period of limitations after any 9 date on which a lapse of a deadline, a court fil-10 ing, or a court order establishes that the tax-11 payer has forfeited or otherwise lost the right to 12 pursue such dispute.''. 13 .--Section 6511(i) of such 14(c) C RROSS DEFERENCE Code is amended by adding at the end the following new 15 paragraph: 16 ''(8) For limitations in case of collection action 17 proceedings, see section 6330(e).''. 18 .--The amendments made by 19(d) E FFECTIVE ATE this section shall apply to the running of any period of 20 limitations if such period (determined without regard to 21 the amendments made by this section) ends on or after 22 the date of the enactment of this Act. 23
SEC. 3. PROHIBITION ON CREDITING OF OVERPAYMENTS 1 AGAINST DISPUTED TAX LIABILITY DURING 2 COLLECTION ACTION PROCEEDINGS. 3
.--Section 6402 of the Internal Rev-4(a) INENERAL enue Code of 1986 is amended by adding at the end the 5 following new subsection: 6 -7''(o) P C OROHIBITION ON REDITING OF VERPAY -8 T L D CLMENTSHGAINSTAISPUTED AAX GIABILITY DURING POL .--If a hearing is properly 9LECTIONCTIONROCEEDINGS requested under section 6320(a)(3)(B) or 6330(a)(3)(B), 10 and an underlying tax liability referred to in section 11 6330(c)(2)(B) is properly disputed at such hearing, such 12 tax liability shall not, except with the consent of the tax-13 payer, be taken into account under subsection (a) for the 14 period during which the period of limitations for filing a 15 claim for credit or refund relating to such tax liability is 16 suspended by reason of section 6330(e).''. 17 18(b) C A CLARIFICATION OF PPLICATION OF ERTAIN .--Section 19R L HEVYEARINGULES TO IEN EARINGS 6330(c)(2)(A) of such Code is amended by striking ''un-20 paid tax or the proposed levy'' and inserting ''unpaid tax, 21 collection action, or proposed collection action''. 22 .-- 23(c) EDFFECTIVEATES .--The amendment made by 24(1) IN GENERAL subsection (a) shall apply with respect to any period 25 described in section 6402(o) of the Internal Revenue 26
Code of 1986 (as added by this section) if any por-1 tion of such period is after the date of the enact-2 ment of this Act. 3 -4 (2) C GLARIFICATION OF APPLICATION OF CER .-- 5TAIN LEVY HEARING RULES TO LIEN HEARINGS The amendment made by subsection (b) shall take 6 effect on the date of the enactment of this Act. 7
SEC. 4. EXPANSION OF JURISDICTION OF TAX COURT. 8
.--Section 6330(d)(1) of the Inter-9(a) INENERAL nal Revenue Code of 1986 is amended to read as follows: 10 .-- 11''(1) PETITION FOR REVIEW BY TAX COURT .--In the case of a deter-12''(A) IN GENERAL mination under this section, the person may, 13 within 30 days of such determination, petition 14 the Tax Court for review of-- 15 ''(i) such determination, and 16 ''(ii) any underlying tax liability re-17 ferred to in subsection (c)(2)(B) which is 18 properly disputed at the hearing in which 19 such determination is made. 20 .-- 21''(B) JURISDICTION OF TAX COURT Upon the filing of a petition, the Tax Court 22 shall have jurisdiction with respect to-- 23 ''(i) the determination referred to in 24 subparagraph (A)(i), 25
''(ii) any underlying tax liability re-1 ferred to in subparagraph (A)(ii), and 2 ''(iii) any equitable tolling of the 30- 3 day deadline referred to in subparagraph 4 (A). 5 .-- 6''(C) R DETENTION OF JURISDICTION Upon a determination being made under this 7 section, subparagraphs (A) and (B) shall apply 8 whether or not the Secretary abandons the col-9 lection action or proposed collection action at 10 issue in such determination.''. 11 .--The amendment made by 12(b) EFFECTIVE ATE this section shall apply with respect to petitions filed after 13 the date of the enactment of this Act. 14
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