H.R. 9496
End Tax Penalties on American Hostages Act
Sponsor: Claudia Tenney
2 cosponsors
Official summary
Written by the Congressional Research Service.
End Tax Penalties on American Hostages Act
This bill extends certain federal tax deadlines for U.S. nationals who are unlawfully or wrongfully detained abroad or held hostage abroad and their spouses. The bill also allows for an abatement and refund of additional taxes, interest, and penalties assessed to such individuals for failing to meet a federal tax deadline during a period of detention.
Specifically, under the bill, the time period during which a U.S. national is unlawfully or wrongfully detained abroad or held hostage abroad is disregarded in determining certain federal tax deadlines, including deadlines for
- filing a return for and paying federal income, estate, gift, employment, or excise taxes;
- a tax credit or refund claim; and
- the determination, assessment, and collection of additional taxes, interest, or penalties.
The bill requires the Department of State and the Department of Justice to annually provide the Internal Revenue Service (IRS) with lists to identify U.S. nationals who qualify for an extension.
The bill also requires the IRS to (1) abate and refund additional taxes, interest, and penalties assessed for any tax year ending during a period of detention for which an extension of a federal tax deadline is permitted; and (2) establish a program allowing U.S. nationals unlawfully or wrongfully detained abroad or taken hostage abroad (or their spouse or dependent) to claim a refund of additional taxes, interest, and penalties assessed for any tax year ending during a period of detention from 2021 to the bill’s enactment date.
Text of the bill
(a) In general. Chapter 77 of the Internal Revenue Code of 1986 is amended by inserting after section 7510 the following new section:
7511. Time for performing certain acts postponed for hostages and individuals wrongfully detained abroad
(a) Time to be disregarded
(1) In general. The period during which an applicable individual was unlawfully or wrongfully detained abroad, or held hostage abroad, shall be disregarded in determining, under the internal revenue laws, in respect of any tax liability of such individual—
(A) whether any of the acts described in section 7508(a)(1) were performed within the time prescribed thereof (determined without regard to extension under any other provision of this subtitle for periods after the initial date (as determined by the Secretary) on which such individual was unlawfully or wrongfully detained abroad or held hostage abroad),
(B) the amount of any interest, penalty, additional amount, or addition to the tax for periods after such date, and
(C) the amount of any credit or refund.
(2) Application to spouse. The provisions of paragraph (1) shall apply to the spouse of any individual entitled to the benefits of such paragraph.
(b) Applicable individual
(1) In general. For purposes of this section, the term applicable individual means any individual who is—
(A) a United States national unlawfully or wrongfully detained abroad, as determined under section 302 of the Robert Levinson Hostage Recovery and Hostage-Taking Accountability Act (22 U.S.C. 1741), or
(B) a United States national taken hostage abroad, as determined pursuant to the findings of the Hostage Recovery Fusion Cell (as described in section 304 of the Robert Levinson Hostage Recovery and Hostage-Taking Accountability Act (22 U.S.C. 1741b)).
(2) Information provided to Treasury. For purposes of identifying individuals described in paragraph (1), not later than January 1, 2027, and annually thereafter—
(A) the Secretary of State shall provide the Secretary with a list of the individuals described in paragraph (1)(A), as well as any other information necessary to identify such individuals, and
(B) the Attorney General, acting through the Hostage Recovery Fusion Cell, shall provide the Secretary with a list of the individuals described in paragraph (1)(B), as well as any other information necessary to identify such individuals.
(c) Special rule for overpayments
(1) In general. Subsection (a) shall not apply for purposes of determining the amount of interest on any overpayment of tax.
(2) Special rules. If an individual is entitled to the benefits of subsection (a) with respect to any return and such return is timely filed (determined after the application of such subsection), subsections (b)(3) and (e) of section 6611 shall not apply.
(d) Modification of Treasury databases and information systems. The Secretary shall ensure that databases and information systems of the Department of the Treasury are updated as necessary to ensure that statute expiration dates, interest and penalty accrual, and collection activities are suspended consistent with the application of subsection (a).
(e) Refund and abatement of penalties and fines imposed prior to identification as applicable individual. In the case of any applicable individual— the Secretary shall abate any such assessment and refund any amount collected to such applicable individual in the same manner as any refund of an overpayment of tax under section 6402.
(1) for whom any interest, penalty, additional amount, or addition to the tax in respect to any tax liability for any taxable year ending during the period described in subsection (a)(1) was assessed or collected, and
(2) who was, subsequent to such assessment or collection, determined to be an individual described in subparagraph (A) or (B) of subsection (b)(1),
(b) Clerical amendment. The table of sections for chapter 77 of such Code is amended by inserting after the item relating to section 7510 the following new item:
Sec. 7511. Time for performing certain acts postponed for hostages and individuals wrongfully detained abroad.
(c) Effective date. The amendments made by this section shall apply to taxable years ending after the date of the enactment of this Act.