A bill to amend the Internal Revenue Code of 1986 to modify procedural requirements for penalties and disallowance periods.
Latest action (28 Jul 2026): Introduced
What this bill does
S. 5143 would amend the Internal Revenue Code's supervisory-approval requirements for tax penalties. Currently, most penalties require written supervisory sign-off before assessment; this bill would extend and clarify that requirement. It specifies that a penalty—or a "disallowance period" barring a taxpayer from claiming certain tax credits again for a set time—cannot take effect unless the decision is personally approved in writing, on an electronic form, by either the immediate supervisor of the IRS employee making the decision or the IRS Office of Servicewide Penalties. That approval must be obtained before the IRS sends the taxpayer its first notice offering an appeal or court challenge. The bill defines "disallowance period" to cover specific credits: the child tax credit, education credits, and the earned income tax credit. It also removes an exception that had let automatically, electronically calculated disallowance periods skip the approval step.
The bill primarily affects IRS internal procedures and, indirectly, taxpayers facing penalties or disallowance of these credits, by requiring documented supervisory review before such actions become final. It also directs Treasury to publish an annual public report, starting 24 months after enactment, detailing penalties assessed by each IRS unit and how each penalty proceeds through determination, assessment, and review.
The changes would apply to notices sent starting 12 months after enactment. The bill was introduced by Senator Michael Bennet on July 28, 2026, and referred to the Senate Finance Committee, where it awaits further action before any vote.
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 28, 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. 5143 do?
- S. 5143 would amend the Internal Revenue Code's supervisory-approval requirements for tax penalties. Currently, most penalties require written supervisory sign-off before assessment; this bill would extend and clarify that requirement. It specifies that a penalty—or a "disallowance period" barring a taxpayer from claiming certain tax credits again for a set time—cannot take effect unless the decision is personally approved in writing, on an electronic form, by either the immediate supervisor of the IRS employee making the decision or the IRS Office of Servicewide Penalties. That approval must be obtained before the IRS sends the taxpayer its first notice offering an appeal or court challenge. The bill defines "disallowance period" to cover specific credits: the child tax credit, education credits, and the earned income tax credit. It also removes an exception that had let automatically, electronically calculated disallowance periods skip the approval step. The bill primarily affects IRS internal procedures and, indirectly, taxpayers facing penalties or disallowance of these credits, by requiring documented supervisory review before such actions become final. It also directs Treasury to publish an annual public report, starting 24 months after enactment, detailing penalties assessed by each IRS unit and how each penalty proceeds through determination, assessment, and review. The changes would apply to notices sent starting 12 months after enactment. The bill was introduced by Senator Michael Bennet on July 28, 2026, and referred to the Senate Finance Committee, where it awaits further action before any vote.
- Has S. 5143 become law?
- Not yet. As of 28 Jul 2026, S. 5143 is introduced.
- Who sponsored S. 5143?
- S. 5143 was sponsored by Sen. Michael Bennet [D-CO] (Democrat-CO), with 0 cosponsors.
- What's the latest action on S. 5143?
- Introduced (28 Jul 2026).
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