Small Tax Case Threshold Modernization Act
Latest action (22 Jul 2026): Introduced
What this bill does
S. 5078, the Small Tax Case Threshold Modernization Act, would amend the Internal Revenue Code's rules for "small tax cases" heard by the U.S. Tax Court. Currently, taxpayers may use this simplified, less formal procedure when the amount in dispute is $50,000 or less. The bill would raise that threshold to $100,000. It would also add an annual inflation adjustment, beginning with cases filed after 2026, tying future increases to the cost-of-living formula already used elsewhere in the tax code, with adjustments rounded down to the nearest $1,000. The section's title would be updated from "disputes involving $50,000 or less" to "small disputes" to reflect the change.
The change primarily affects individual taxpayers and businesses disputing federal tax assessments who prefer the Tax Court's simplified small-case procedure, which is generally quicker and less costly than regular Tax Court litigation. Raising the dollar threshold would let more taxpayers with moderate-sized disputes qualify for this streamlined process.
The bill was introduced in the Senate on July 22, 2026, by Senator John Cornyn, with Senator Ben Ray Luján as a cosponsor, and referred to the Senate Finance Committee. It would need to be approved by that committee, pass the full Senate and House, and be signed by the President before taking effect. If enacted, the new thresholds would apply to Tax Court proceedings begun after the law's enactment.
Plain-English summary generated by Bill100 AI from the official record. Always verify against the source below.
Official summary
This bill is in the first stage of the legislative process. It was introduced into Congress on July 22, 2026. It will typically be considered by committee next before it is possibly sent on to the House or Senate as a whole.
Common questions
- What does S. 5078 do?
- S. 5078, the Small Tax Case Threshold Modernization Act, would amend the Internal Revenue Code's rules for "small tax cases" heard by the U.S. Tax Court. Currently, taxpayers may use this simplified, less formal procedure when the amount in dispute is $50,000 or less. The bill would raise that threshold to $100,000. It would also add an annual inflation adjustment, beginning with cases filed after 2026, tying future increases to the cost-of-living formula already used elsewhere in the tax code, with adjustments rounded down to the nearest $1,000. The section's title would be updated from "disputes involving $50,000 or less" to "small disputes" to reflect the change. The change primarily affects individual taxpayers and businesses disputing federal tax assessments who prefer the Tax Court's simplified small-case procedure, which is generally quicker and less costly than regular Tax Court litigation. Raising the dollar threshold would let more taxpayers with moderate-sized disputes qualify for this streamlined process. The bill was introduced in the Senate on July 22, 2026, by Senator John Cornyn, with Senator Ben Ray Luján as a cosponsor, and referred to the Senate Finance Committee. It would need to be approved by that committee, pass the full Senate and House, and be signed by the President before taking effect. If enacted, the new thresholds would apply to Tax Court proceedings begun after the law's enactment.
- Has S. 5078 become law?
- Not yet. As of 22 Jul 2026, S. 5078 is introduced.
- Who sponsored S. 5078?
- S. 5078 was sponsored by Sen. John Cornyn [R-TX] (Republican-TX), with 1 cosponsor.
- What's the latest action on S. 5078?
- Introduced (22 Jul 2026).
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