HR 9496 — End Tax Penalties on American Hostages Act

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

 In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows.

 Changes in Existing Law Made by the Bill, as Reported

 In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (new matter is 
printed in italics and existing law in which no change is 
proposed is shown in roman):

 INTERNAL REVENUE CODE OF 1986

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 Subtitle F--Procedure and Administration

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 CHAPTER 77--MISCELLANEOUS PROVISIONS

Sec. 7501. Liability for taxes withheld or collected.
 
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Sec. 7511. Time for performing certain acts postponed for hostages and 
 individuals wrongfully detained abroad.

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SEC. 7511. TIME FOR PERFORMING CERTAIN ACTS POSTPONED FOR HOSTAGES AND 
 INDIVIDUALS WRONGFULLY DETAINED ABROAD.

 (a) Time to Be Disregarded.--
 (1) In general.--The period during which an 
 applicable individual was unlawfully or wrongfully 
 detained abroad, or held hostage abroad, shall be 
 disregarded in determining, under the internal revenue 
 laws, in respect of any tax liability of such 
 individual--
 (A) whether any of the acts described in 
 section 7508(a)(1) were performed within the 
 time prescribed thereof (determined without 
 regard to extension under any other provision 
 of this subtitle for periods after the initial 
 date (as determined by the Secretary) on which 
 such individual was unlawfully or wrongfully 
 detained abroad or held hostage abroad),
 (B) the amount of any interest, penalty, 
 additional amount, or addition to the tax for 
 periods after such date, and
 (C) the amount of any credit or refund.
 (2) Application to spouse.--The provisions of 
 paragraph (1) shall apply to the spouse of any 
 individual entitled to the benefits of such paragraph.
 (b) Applicable Individual.--
 (1) In general.--For purposes of this section, the 
 term ``applicable individual'' means any individual who 
 is--
 (A) a United States national unlawfully or 
 wrongfully detained abroad, as determined under 
 section 302 of the Robert Levinson Hostage 
 Recovery and Hostage-Taking Accountability Act 
 (22 U.S.C. 1741), or
 (B) a United States national taken hostage 
 abroad, as determined pursuant to the findings 
 of the Hostage Recovery Fusion Cell (as 
 described in section 304 of the Robert Levinson 
 Hostage Recovery and Hostage-Taking 
 Accountability Act (22 U.S.C. 1741b)).
 (2) Information provided to treasury.--For purposes 
 of identifying individuals described in paragraph (1), 
 not later than January 1, 2027, and annually 
 thereafter--
 (A) the Secretary of State shall provide the 
 Secretary with a list of the individuals 
 described in paragraph (1)(A), as well as any 
 other information necessary to identify such 
 individuals, and
 (B) the Attorney General, acting through the 
 Hostage Recovery Fusion Cell, shall provide the 
 Secretary with a list of the individuals 
 described in paragraph (1)(B), as well as any 
 other information necessary to identify such 
 individuals.
 (c) Special Rule for Overpayments.--
 (1) In general.--Subsection (a) shall not apply for 
 purposes of determining the amount of interest on any 
 overpayment of tax.
 (2) Special rules.--If an individual is entitled to 
 the benefits of subsection (a) with respect to any 
 return and such return is timely filed (determined 
 after the application of such subsection), subsections 
 (b)(3) and (e) of section 6611 shall not apply.
 (d) Modification of Treasury Databases and Information 
Systems.--The Secretary shall ensure that databases and 
information systems of the Department of the Treasury are 
updated as necessary to ensure that statute expiration dates, 
interest and penalty accrual, and collection activities are 
suspended consistent with the application of subsection (a).
 (e) Refund and Abatement of Penalties and Fines Imposed Prior 
to Identification as Applicable Individual.--In the case of any 
applicable individual--
 (1) for whom any interest, penalty, additional 
 amount, or addition to the tax in respect to any tax 
 liability for any taxable year ending during the period 
 described in subsection (a)(1) was assessed or 
 collected, and
 (2) who was, subsequent to such assessment or 
 collection, determined to be an individual described in 
 subparagraph (A) or (B) of subsection (b)(1),
the Secretary shall abate any such assessment and refund any 
amount collected to such applicable individual in the same 
manner as any refund of an overpayment of tax under section 
6402.
 (f) Refund and Abatement of Penalties and Fines Paid by 
Eligible Individuals With Respect to Periods Prior to Date of 
Enactment of This Section.--
 (1) In general.--
 (A) Establishment.--Not later than January 1, 
 2027, the Secretary (in consultation with the 
 Secretary of State and the Attorney General) 
 shall establish a program to allow any eligible 
 individual (or the spouse or any dependent (as 
 defined in section 152) of such individual) to 
 apply for a refund or an abatement of any 
 amount described in paragraph (2) (including 
 interest) to the extent such amount was 
 attributable to the applicable period.
 (B) Identification of individuals.--Not later 
 than January 1, 2027, the Secretary of State 
 and the Attorney General, acting through the 
 Hostage Recovery Fusion Cell (as described in 
 section 304 of the Robert Levinson Hostage 
 Recovery and Hostage-Taking Accountability Act 
 (22 U.S.C. 1741b)), shall--
 (i) compile a list, based on such 
 information as is available, of 
 individuals who were eligible 
 individuals during the applicable 
 period, and
 (ii) provide the list described in 
 clause (i) to the Secretary.
 (C) Notice.--For purposes of carrying out the 
 program described in subparagraph (A), the 
 Secretary (in consultation with the Secretary 
 of State and the Attorney General) shall, with 
 respect to any individual identified under 
 subparagraph (B), provide notice to such 
 individual--
 (i) in the case of an individual who 
 has been released on or before the date 
 of the enactment of this subsection, 
 not later than 90 days after the date 
 of the enactment of this subsection, or
 (ii) in the case of an individual who 
 is released after the date of the 
 enactment of this subsection, not later 
 than 90 days after the date on which 
 such individual is released,
 that such individual may be eligible for a 
 refund or an abatement of any amount described 
 in paragraph (2) pursuant to the program 
 described in subparagraph (A).
 (D) Authorization.--
 (i) In general.--Subject to clause 
 (ii), in the case of any refund 
 described in subparagraph (A), the 
 Secretary shall issue such refund to 
 the eligible individual in the same 
 manner as any refund of an overpayment 
 of tax.
 (ii) Extension of limitation on time 
 for refund.--With respect to any refund 
 under subparagraph (A)--
 (I) the 3-year period of 
 limitation prescribed by 
 section 6511(a) shall be 
 extended until the end of the 
 1-year period beginning on the 
 date that the notice described 
 in subparagraph (C) is provided 
 to the eligible individual, and
 (II) any limitation under 
 section 6511(b)(2) shall not 
 apply.
 (2) Eligible individual.--For purposes of this 
 subsection, the term ``eligible individual'' means any 
 applicable individual who, for any taxable year ending 
 during the applicable period, paid or incurred any 
 interest, penalty, additional amount, or addition to 
 the tax in respect to any tax liability for such year 
 of such individual based on a determination that an act 
 described in section 7508(a)(1) was not performed by 
 the time prescribed therefor (without regard to any 
 extensions).
 (3) Applicable period.--For purposes of this 
 subsection, the term ``applicable period'' means the 
 period--
 (A) beginning on January 1, 2021, and
 (B) ending on the date of the enactment of 
 this subsection.

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