End Tax Penalties on Hostages

Summary#

This bill changes the Internal Revenue Code to pause certain tax deadlines and to refund or abate interest, penalties, and related amounts for United States nationals who are unlawfully or wrongfully detained abroad or taken hostage. The time a person is detained or held hostage is "disregarded" when determining whether tax acts were performed on time, and it affects interest, penalties, credits, and refunds. The spouse of an eligible person may also get these benefits. The Secretary of State and the Attorney General (through the Hostage Recovery Fusion Cell) must provide lists of eligible individuals to the Secretary of the Treasury by January 1, 2027 and annually after that. The Treasury must update its databases to suspend accruals and collection activity. The bill requires abatement and refund of penalties and amounts already assessed or collected once a person is identified. It also creates a program for refunds or abatements of penalties and interest paid for the period from January 1, 2021 through the date of enactment; the Secretary must establish that program by January 1, 2027, provide notice to identified individuals, and extend refund time limits. The amendments apply to taxable years ending after enactment for the postponement rules and to taxable years ending on or before enactment for the refund program.

What it means for you#

• If you are a United States national who was unlawfully or wrongfully detained abroad or taken hostage, the period of detention will be ignored for tax filing and penalty deadlines under the rules in the bill. Your spouse may also qualify.
• If penalties, interest, or other amounts were assessed or collected during the detention period before you were identified, the Treasury is instructed to abate and refund those amounts once you are identified.
• If you were detained between January 1, 2021 and the bill's enactment and paid taxes, penalties, or interest for that period, you may apply to a new Treasury program for a refund or abatement. The Treasurer must notify identified individuals about the program.
• Federal agencies (State and the Attorney General/Hostage Recovery Fusion Cell) must share lists of eligible individuals with Treasury to make these changes work.

Expenses#

No publicly available information.

Proponents' View#

The bill’s stated purpose is to postpone tax deadlines and reimburse paid late fees for United States nationals unlawfully or wrongfully detained abroad or taken hostage, and to set up a program to refund penalties and interest paid for the specified prior period. It includes procedures for identifying eligible individuals and for Treasury system updates.

Opponents' View#

No publicly available information.