Legislation guaranteeing taxpayers can have their day in court if they dispute the Internal Revenue Service, passed the House this week.
The legislation, the Taxpayer Due Process Enhancement Act, introduced by U.S. Reps. Nathanial Moran (R-TX) and Terri Sewell (D-AL), aims to strengthen taxpayer rights by making IRS collection proceedings more taxpayer-friendly, safeguarding refunds from being unfairly taken by the IRS, and ensuring fair judicial review of tax liability claims.
“Today, we are strengthening taxpayer rights and ensuring Americans have a clear path to challenge the IRS,” Moran said. “This legislation advances fairness and accountability in our tax system—guaranteeing no one loses their day in court over arbitrary deadlines or IRS overreach. By protecting taxpayer rights, extending filing windows, and strengthening Tax Court jurisdiction, we are delivering real, lasting safeguards for every American.”
The legislation would suspend the period of limitations for filing a claim for credit or refund during an IRS Collection Due Process (CDP) proceeding, which would give taxpayers more time to receive their refunds. The bill would also block the IRS from applying a taxpayer’s overpayment to any tax they are currently disputing and expand Tax Court’s CDP jurisdiction.
The legislation comes after a June 2025 U.S. Supreme Court decision found that Tax Court cannot hear a CDP appeal if the IRS drops its attempt to seize property and instead chooses a different method to take taxpayer’s assets.
“Uncle Sam should not be able to circumvent the basic rights of American citizens,” U.S. Rep Jason Smith (R-MO), chair of the House Ways and Means Committee said. “Unfortunately, right now, we have tax laws and judicial rulings that undermine taxpayer rights and could allow the IRS to impose penalties on individuals absent any judicial review. Thankfully, the House has acted to right this wrong and ensure American taxpayers are afforded their day in court.”