A bill to amend the Internal Revenue Code of 1986 to improve the notice and review procedure with respect to multi-year bans on claiming credits.

This bill amends the Internal Revenue Code to significantly improve the notice and review process for taxpayers facing multi-year bans on claiming specific refundable tax credits. These credits include the Child Tax Credit, American Opportunity Tax Credit, and Earned Income Tax Credit. The legislation aims to provide greater due process and judicial oversight when the Internal Revenue Service denies these credits and imposes a disallowance period.

The bill mandates that the IRS provide taxpayers with more detailed notices when a credit is denied, clearly stating the grounds for denial and explaining the implications of a multi-year ban. This notice must also specify the reasons and length of any imposed disallowance period. Furthermore, the legislation grants the Tax Court new jurisdiction to redetermine whether a disallowance period was properly imposed, including a transition rule for reviewing certain previously imposed bans.

Under the new provisions, a taxable year will not be considered part of a disallowance period if the Tax Court finds that the ban was improperly applied. The bill also clarifies that the IRS bears the burden of production regarding the application of any disallowance period in court proceedings. Additionally, it suspends the statute of limitations for claiming a credit or refund while the imposition of a disallowance period is under review by the Tax Court, safeguarding taxpayer rights during the appeal process.