[Congressional Record Volume 171, Number 200 (Monday, December 1, 2025)]
[House]
[Pages H4940-H4942]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                  FAIR AND ACCOUNTABLE IRS REVIEWS ACT

  Mr. SMITH of Missouri. Mr. Speaker, I move to suspend the rules and 
pass the bill (H.R. 5346) to amend the Internal Revenue Code of 1986 to 
reform certain penalty and interest provisions, as amended.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 5346

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Fair and Accountable IRS 
     Reviews Act''.

[[Page H4941]]

  


     SEC. 2. PROCEDURAL REQUIREMENTS FOR ASSESSMENT OF PENALTIES.

       (a) Approval of Assessment.--Section 6751(b)(1) of the 
     Internal Revenue Code of 1986 is amended to read as follows:
       ``(1) In general.--No penalty under this title shall be 
     assessed or entered unless, before any written communication 
     with respect to such penalty (including proposal of a penalty 
     as an adjustment) is sent to the taxpayer, the initial 
     determination of such assessment is personally approved (in 
     writing) by the immediate supervisor of the individual making 
     such determination or such higher level official as the 
     Secretary may designate.''.
       (b) Immediate Supervisor Defined.--Section 6751(b) of such 
     Code is amended by adding at the end the following new 
     paragraph:
       ``(3) Immediate supervisor.--For purposes of this 
     subsection, the term `immediate supervisor' means, with 
     respect to an individual making a determination under 
     paragraph (1), the person to whom such individual reports.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to notices issued, and penalties assessed, after 
     December 31, 2025.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Missouri (Mr. Smith) and the gentlewoman from Alabama (Ms. Sewell) each 
will control 20 minutes.
  The Chair recognizes the gentleman from Missouri.


                             General Leave

  Mr. SMITH of Missouri. Mr. Speaker, I ask unanimous consent that all 
Members may have 5 legislative days to revise and extend their remarks 
and submit extraneous material on the bill under consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Missouri?
  There was no objection.

                              {time}  1720

  Mr. SMITH of Missouri. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, I rise today in support of the Fair and Accountable IRS 
Reviews Act introduced by our colleague, Representative Glenn Grothman.
  While not a member of the Committee on Ways and Means, I know 
Representative Grothman to be a tireless advocate for American 
taxpayers, as represented by this important piece of legislation that 
will go a very long way toward protecting their rights.
  The legislation ensures that rogue IRS employees are not able to 
unfairly impose penalties and fines on taxpayers without going through 
proper channels of authorization and doing so in a timely manner.
  Right now, an IRS agent can impose a penalty on an American taxpayer 
before obtaining a supervisor's approval. Moreover, they can shop 
around for any other employee at the agency that they wish to seek 
permission from since current law does not require approval from a 
direct supervisor.
  These loopholes undermine the no-signature, no-penalty principle. 
Representative Grothman's bill received unanimous support at the 
Committee on Ways and Means. It is an important policy reform that will 
reinforce fair treatment of taxpayers at the IRS.
  Mr. Speaker, I reserve the balance of my time.
  Ms. SEWELL. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I rise in support of H.R. 5346, the Fair and Accountable 
IRS Reviews Act.
  Mr. Speaker, I thank Chairman Jason Smith for putting this bill on 
the floor, and I thank the gentleman for always remembering that it is 
better to do things in a bipartisan way.
  This bill clarifies procedures under section 6751 of the Internal 
Revenue Code and fixes an ongoing controversy regarding tax penalties 
and IRS supervisory approvals.
  The IRS Restructuring and Reform Act of 1998 added section 6751 to 
the Internal Revenue Code, which says that certain tax penalties shall 
not be assessed unless the initial determination of the assessment is 
personally approved, in writing, by the immediate supervisor of the 
employee making the determination, or a higher-level official.
  This provision, in its current form, does not define when supervisory 
approval must be obtained or who is considered an immediate supervisor. 
The lack of definition has led to conflicting decisions in the court 
regarding the time of approvals and among whom at the IRS can make such 
approvals.
  Due to this widespread confusion, the National Taxpayer Advocate 
recommended that Congress enact legislation to fix this provision. 
Therefore, this bill clarifies that an IRS employee must obtain 
supervisory approval in writing before any written communication is 
sent to a taxpayer about certain proposed penalties. It also clarifies 
that an IRS employee's immediate supervisor is a person to whom the 
employee reports.
  In addition to providing clarity, this bill also raises $117 million 
over the next 10 years. This bill passed the Committee on Ways and 
Means with overwhelming bipartisan support.
  Mr. Speaker, I urge my colleagues on both sides of the aisle to 
support this very important clarification bill.
  Mr. Speaker, I reserve the balance of my time.
  Mr. SMITH of Missouri. Mr. Speaker, I yield such time as he may 
consume to the gentleman from Wisconsin (Mr. Grothman).
  Mr. GROTHMAN. Mr. Speaker, I thank the previous speakers for their 
kind words and assistance on this bill. I also will address the Fair 
and Accountable IRS Reviews Act.
  For decades, Federal laws required that before the IRS can impose 
penalties on a taxpayer, an agent must first receive written approval 
from that agent's immediate supervisor.
  Congress put this safeguard in place to ensure that penalties are 
imposed fairly, consistently, and with appropriate oversight. A 
supervisor's signature helps prevent the use of penalties as a pressure 
tactic and creates a transparent record that benefits both taxpayers 
and the government in collection and appeals proceedings.
  In recent years, unfortunately, a regulatory interpretation 
complicated the intent of this longstanding statute. Instead of 
adhering to the clear requirement that an agent's immediate supervisor 
must approve a penalty at the time of the initial determination, 
supervisory appeal could be obtained at any point in the process and 
the term ``immediate supervisor'' was broadened beyond Congress' 
original intent.
  As a result, an agent could propose a penalty without prior review 
and later seek approval from a wide range of individuals, weakening the 
transparency and accountability that the law was designed to ensure.
  The Fair and Accountable IRS Reviews Act restores clarity. It 
reaffirms that an IRS agent's actual immediate supervisor must provide 
written approval at the initial determination of a penalty, ensuring 
proper oversight from the start. This simple clarification strengthens 
the taxpayer protections and promotes a consistent and reliable penalty 
process.
  Mr. Speaker, Americans deserve a tax system that is fair, 
predictable, and transparent. This bill moves us closer to that goal.
  I thank Chairman Smith for his leadership on the Committee on Ways 
and Means and all of the Members on the other side of the aisle who 
helped shoot it out of the committee on such a bipartisan basis. I 
thank Chairman Smith for his commitment to strengthening fairness and 
accountability within our tax system.
  Mr. Speaker, I urge my colleagues to support the bill.
  Ms. SEWELL. Mr. Speaker, I yield myself the balance of my time for 
the purposes of closing.
  Mr. Speaker, H.R. 5346 is a commonsense bill that will help taxpayers 
and the courts. I urge my colleagues on both sides of the aisle to 
support this bill because not only is it common sense, but it will 
allow for more efficiency in our IRS code. I think it is really 
important that both sides of the aisle, Democrats and Republicans, 
support such an efficient and commonsense bill.

  Mr. Speaker, I yield back the balance of my time.
  Mr. SMITH of Missouri. Mr. Speaker, I yield myself the balance of my 
time.
  Mr. Speaker, American taxpayers should not be at the mercy of rogue 
IRS agents who are handing out fines without reasonable due process. At 
the very least, agents ought to have actual prior approval before 
issuing a penalty and should not be allowed to go around looking for a 
sympathetic employee to grant them that approval.
  I commend our colleague, Representative Grothman, for introducing 
this straightforward legislation that puts in place some guardrails 
around the IRS and its agents. This bill will help restore integrity to 
the agency's processes. Above all, it will protect the

[[Page H4942]]

rights of American taxpayers, whose interests we must continue to look 
out for.
  Mr. Speaker, I encourage my colleagues to vote ``yes'' on the Fair 
and Accountable IRS Reviews Act, and I yield back the balance of my 
time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from Missouri (Mr. Smith) that the House suspend the rules 
and pass the bill, H.R. 5346, as amended.
  The question was taken; and (two-thirds being in the affirmative) the 
rules were suspended and the bill, as amended, was passed.
  A motion to reconsider was laid on the table.

                          ____________________