Bill · S. 3587· Senate(119-S-3587)
No Tax on Wrongful Delay Act of 2026
- Introduced
- 1/7/2026
- Last activity
- 1/7/2026 — Read twice and referred to the Committee on Finance.
- Sponsored by
- Marsha Blackburn
- Cosponsors
- None
- Introduced
- In Committee
What this bill would do
This bill, known as the "No Tax on Wrongful Delay Act of 2026," seeks to amend the Internal Revenue Code of 1986. It aims to provide an exemption from gross income for interest paid to taxpayers by the Internal Revenue Service. This exemption would apply after an audit or litigation where the taxpayer prevailed. The changes would apply to taxable years beginning after December 31, 2025.
Yes· 3 of 7
Would people over 65 be better off under this?+3
The bill exempts interest from overpayments from being taxed, which benefits seniors on fixed incomes.
Would households on low incomes be better off under this?+3
Taxpayers receiving interest on overpayments will keep the full amount without tax liability.
Would middle-income households be better off under this?+3
The bill prevents the taxation of interest owed to taxpayers after successful IRS disputes.
The opposite
No question was scored the opposite.
Who it would affect, and how
Potential Positive Impacts for People
- Tax Exemption on Interest: Under Section 2(a), gross income would not include interest required to be paid upon an overpayment following specific IRS actions. This means taxpayers who prevail in an examination, a suit for a tax credit or refund, or a civil action commenced by the United States would not have to pay taxes on that interest.
Potential Negative Impacts for People
- No negative impacts are explicitly stated in the provided text.
Groups and Interests Ranking
Every group the model scored this bill for, from -10 to +10. Hover a score for the reason it gave.
- Demographic And Interest Groups
- Good For High Income Households+3Good For Low Income Households+3Good For Middle Class Households+3Good For Retirees+3Good For Seniors+3
- Economy And Finance
- Reduces Middle Class Taxes+3Reduces Small Business Taxes+3
- 1/7/2026
- Read twice and referred to the Committee on Finance.
- Introduced in Senate