Senate Tax Writers Introduce New Tax Administration Bill

Senate Finance Chairman Mike Crapo, R-Idaho, and Ranking Minority Member Ron Wyden, D-Oregon, released an updated version of their bipartisan tax administration bill (S. 3931) on February 26, 2026. The Taxpayer Assistance and Service Act (“TAS Act”) includes changes to IRS and U.S. Tax Court processes and procedures suggested by the National Taxpayer Advocate (NTA) as well as other members of Congress (see the section-by-section summary of the legislation). A discussion draft of the bill was released last year, but the new version refines and adds several provisions while removing others that have advanced separately as stand-alone legislation.

BDO Takeaway: The TAS Act could benefit taxpayers by removing certain inefficiencies in IRS processes, strengthening taxpayer protections and rights, clarifying and expanding the U.S. Tax Court’s jurisdiction, and strengthening the independence of the IRS Office of Appeals and NTA. Many of the provisions enjoy bipartisan support, but it may be difficult for tax legislation to move forward this year. 

Administrative and Procedural Fixes

Under the TAS Act, the IRS would be required to move toward digitalization by allowing all returns to be filed electronically and to process all returns electronically. In addition, the bill would lower the threshold for requiring e-filing for partnerships from 100 partners to 50 partners or $1 million in assets. The IRS would also be required to update and create new taxpayer-facing dashboards tracking taxpayer refunds, amended returns, IRS call times, backlogs, and processing times. These changes are intended to reduce the volume of calls to the IRS, as well as to improve taxpayer expectations. 

For individual taxpayers facing financial hardship, the TAS Act proposes changes to automate the refund offset bypass process for taxpayers with known hardship cases. Additionally, the TAS Act seeks to reduce certain fees, and addresses the issue whether the IRS can assess certain penalties that was raised in recent court cases. (For prior coverage, see IRS Has Authority to Assess Section 6038 Penalties). 

The TAS Act would also tackle the question of failure-to-pay penalties that are imposed on taxpayers who fail to pay the full amount of tax due by the original due date of the return when requesting an extension of time to file a tax return. The proposed legislation would waive the failure-to-pay penalties for individual taxpayers who make estimated payments equal to 125% of their prior year tax by the original due date. 

Moreover, the TAS Act would extend a version of the “mailbox rule” for physical mailings and paper filings so that it would apply to electronic submissions. Under the current version of the bill, an electronic submission would be deemed timely if the taxpayer authorizes it for submission by the payment or return due date, as long as the submission is actually “received” no more than three business days after the due date. The three-day requirement was added in the newest version of the bill and differs from a stand-alone bill addressing this issue that passed the House in 2025 (H.R. 1152). 

Refund Claims

The TAS Act would expand taxpayers’ ability to pursue refund claims in two important ways. First, the legislation would require the IRS to issue a determination on a refund claim within 12 months (down from 36 months in the discussion draft). Under current law, the IRS is not required to act on refund claims at all, but taxpayers can file suit if the IRS has not responded after six months. The legislation would allow taxpayers to appeal a denial of a refund claim to the independent Office of Appeals. In addition, it would expand the U.S. Tax Court’s jurisdiction to cover refund claims, a significant change in the court’s jurisdiction, which would provide another venue for refund suits in addition to U.S. district courts and the U.S. Court of Federal Claims. 

The TAS Act would also expand Tax Court jurisdiction and strengthen the Appeals process in several other important ways. 

Judicial Review

Currently, the Tax Court is comprised of 19 presidentially appointed Tax Court judges as well as special trial judges. The TAS Act proposes to expand the authority granted to the special trial judges so that they can hear smaller, less complex cases by raising the threshold of small tax cases from $50,000 to $100,000. Additionally, the TAS Act would allow the Tax Court to order the issuance of refunds in collection due process cases. 

Office of the National Taxpayer Advocate & Office of Appeals

The TAS Act would strengthen the independence of the Office of the National Taxpayer Advocate as well as the Office of Appeals by authorizing the two offices to take more control over the hiring of their own attorneys and personnel. Further, the TAS Act would require the IRS to share requested information with the NTA and comply with information-sharing agreements. 

American Citizens Abroad

Under current law, U.S. citizens residing and/or working abroad face reporting and tax filing requirements that can prove burdensome. The TAS Act would mandate that focus groups be conducted to determine the impact of filing and reporting obligations and relieve certain duplicative burdens. Further, the TAS Act would expand certain rights to appeal for U.S. citizens living or working abroad. 

Tax Preparers

Currently, paid preparers are not required to hold any form of certification other than a preparer tax identification number (PTIN). Nearly 15 years ago, the IRS proposed a “registered tax return preparer” credential system, which would have required uncredentialed and unlicensed return preparers to take an exam and fulfill continuing education requirements to prepare returns. That proposed plan was invalidated by the U.S. District Court for the District of Columbia, whose decision was affirmed by the U.S. Court of Appeals for the District of Columbia Circuit. The TAS Act would require unlicensed return preparers to undergo more rigorous training and certification, increase several preparer penalties and fees, and criminalize preparers who provide or use incorrect or fraudulent PTINs.

Legislative Outlook

Tax administration bills have been a source of rare bipartisan success over the past year. Lawmakers in 2025 enacted two bills on disaster tax relief, as well as legislation restricting IRS math error authority. Five additional tax administration bills have passed the House and are pending in the Senate, while three others have passed the Ways and Means Committee (see Senate Sends Disaster Tax Relief Bill to President). Several provisions in these bills overlap with the TAS Act.