Stop Tax Penalties on American Hostages Act

II 118TH CONGRESS 1ST SESSION S. 1679 To amend the Internal Revenue Code of 1986 to postpone tax deadlines and reimburse paid late fees for United States nationals who are unlaw- fully or wrongfully detained or held hostage abroad, and for other pur- poses. IN THE SENATE OF THE UNITED STATES MAY 18, 2023 Mr. COONS (for himself and Mr. ROUNDS) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend the Internal Revenue Code of 1986 to postpone tax deadlines and reimburse paid late fees for United States nationals who are unlawfully or wrongfully de- tained or held hostage abroad, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Stop Tax Penalties 4 on American Hostages Act’’. 5 VerDate Sep 11 2014 02:37 Jun 02, 2023 Jkt 039200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S1679.IS S1679 kjohnson on DSK79L0C42PROD with BILLS 2 •S 1679 IS SEC. 2. POSTPONEMENT OF TAX DEADLINES FOR HOS- 1 TAGES AND INDIVIDUALS WRONGFULLY DE- 2 TAINED ABROAD. 3 (a) IN GENERAL.—Chapter 77 of the Internal Rev- 4 enue Code of 1986 is amended by inserting after section 5 7510 the following new section: 6 ‘‘SEC. 7511. TIME FOR PERFORMING CERTAIN ACTS POST- 7 PONED FOR HOSTAGES AND INDIVIDUALS 8 WRONGFULLY DETAINED ABROAD. 9 ‘‘(a) IN GENERAL.—Any applicable individual shall 10 be entitled to the benefits of section 7508 in the same 11 manner as if such individual was performing services de- 12 scribed in subsection (a) of such section for any period 13 in which such individual was— 14 ‘‘(1) unlawfully or wrongfully detained abroad, 15 or 16 ‘‘(2) held hostage abroad. 17 ‘‘(b) APPLICABLE INDIVIDUAL.— 18 ‘‘(1) IN GENERAL.—For purposes of this sec- 19 tion, the term ‘applicable individual’ means any indi- 20 vidual who is— 21 ‘‘(A) included on the list of United States 22 nationals unlawfully or wrongfully detained that 23 is included in the annual report required under 24 section 302(c) of the Robert Levinson Hostage 25 VerDate Sep 11 2014 02:37 Jun 02, 2023 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S1679.IS S1679 kjohnson on DSK79L0C42PROD with BILLS 3 •S 1679 IS Recovery and Hostage-Taking Accountability 1 Act (22 U.S.C. 1741(c)), or 2 ‘‘(B) a United States national taken hos- 3 tage abroad, as determined in a manner con- 4 sistent with the findings of the Hostage Recov- 5 ery Fusion Cell (as described in section 304 of 6 the Robert Levinson Hostage Recovery and 7 Hostage-Taking Accountability Act (22 U.S.C. 8 1741b)). 9 ‘‘(2) INFORMATION PROVIDED TO TREASURY.— 10 For purposes of identifying individuals described in 11 paragraph (1), not later than January 1, 2024, and 12 annually thereafter— 13 ‘‘(A) the Secretary of State shall provide 14 the Secretary with the report described in para- 15 graph (1)(A), as well as any other information 16 necessary to identify the individuals described 17 in such report, and 18 ‘‘(B) the Attorney General, acting through 19 the Hostage Recovery Fusion Cell, shall provide 20 the Secretary with a list of the individuals de- 21 scribed in paragraph (1)(B), as well as any 22 other information necessary to identify such in- 23 dividuals. 24 VerDate Sep 11 2014 02:37 Jun 02, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S1679.IS S1679 kjohnson on DSK79L0C42PROD with BILLS 4 •S 1679 IS ‘‘(c) APPLICATION TO SPOUSE.—The provisions of 1 this section shall apply to the spouse of any individual en- 2 titled to the benefits of subsection (a).’’. 3 (b) CLERICAL AMENDMENT.—The table of sections 4 for chapter 77 of the Internal Revenue Code of 1986 is 5 amended by inserting after the item relating to section 6 7510 the following new item: 7 ‘‘Sec. 7511. Time for performing certain acts postponed for hostages and indi- viduals wrongfully detained abroad.’’. (c) EFFECTIVE DATE.—The amendments made by 8 this section shall apply to taxable years ending after the 9 date of enactment of this Act. 10 SEC. 3. REIMBURSEMENT AND ABATEMENT OF PENALTIES 11 AND FINES PAID BY ELIGIBLE INDIVIDUALS. 12 (a) IN GENERAL.— 13 (1) ESTABLISHMENT.—Not later than January 14 1, 2024, the Secretary (in consultation with the Sec- 15 retary of State and the Attorney General) shall es- 16 tablish a program to allow any eligible individual (or 17 the spouse or any dependent (as defined in section 18 152 of the Internal Revenue Code of 1986) of such 19 individual) to apply for reimbursement or abatement 20 of any amount described in subsection (b) (including 21 interest) to the extent such amount was attributable 22 to the applicable period. 23 VerDate Sep 11 2014 02:37 Jun 02, 2023 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S1679.IS S1679 kjohnson on DSK79L0C42PROD with BILLS 5 •S 1679 IS (2) NOTICE.—For purposes of carrying out the 1 program described in paragraph (1), the Secretary 2 (in consultation with the Secretary of State and the 3 Attorney General) shall, with respect to any indi- 4 vidual identified under subsection (c), provide notice 5 to such individual— 6 (A) in the case of an individual who has 7 been released on or before the date of enact- 8 ment of this Act, not later than 90 days after 9 the date of enactment of this Act; or 10 (B) in the case of an individual who is re- 11 leased after the date of enactment of this Act, 12 not later than 90 days after the date on which 13 such individual is released, 14 that such individual may be eligible for reimburse- 15 ment of any amount described in subsection (b) pur- 16 suant to the program described in paragraph (1). 17 (3) AUTHORIZATION.— 18 (A) IN GENERAL.—Subject to subpara- 19 graph (B), in the case of any reimbursement 20 described in paragraph (1), the Secretary shall 21 issue such reimbursement to the eligible indi- 22 vidual in the same manner as any refund of an 23 overpayment of tax. 24 VerDate Sep 11 2014 02:37 Jun 02, 2023 Jkt 039200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S1679.IS S1679 kjohnson on DSK79L0C42PROD with BILLS 6 •S 1679 IS (B) EXTENSION OF LIMITATION ON TIME 1 FOR REIMBURSEMENT.—With respect to any 2 reimbursement under paragraph (1)— 3 (i) the 3-year period of limitation pre- 4 scribed by section 6511(a) of the Internal 5 Revenue Code of 1986 shall not expire be- 6 fore the date which is 1 year after the date 7 the notice described in paragraph (2) is 8 provided to the eligible individual; and 9 (ii) any limitation under section 10 6511(b)(2) of such Code shall not apply. 11 (b) ELIGIBLE INDIVIDUAL.—For purposes of this 12 section, the term ‘‘eligible individual’’ means any applica- 13 ble individual (as defined in section 7511(b)(1) of the In- 14 ternal Revenue Code of 1986) who, for any taxable year 15 ending during the applicable period, paid or incurred any 16 interest, penalty, additional amount, or addition to the tax 17 in respect to any tax liability for such year of such indi- 18 vidual based on a determination that an act described in 19 paragraph (1) of section 7508(a) of the Internal Revenue 20 Code of 1986 which was not performed by the time pre- 21 scribed therefor (without regard to any extensions). 22 (c) IDENTIFICATION OF INDIVIDUALS.—Not later 23 than January 1, 2024, the Secretary of State and the At- 24 torney General, acting through the Hostage Recovery Fu- 25 VerDate Sep 11 2014 02:37 Jun 02, 2023 Jkt 039200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S1679.IS S1679 kjohnson on DSK79L0C42PROD with BILLS 7 •S 1679 IS sion Cell (as described in section 304 of the Robert 1 Levinson Hostage Recovery and Hostage-Taking Account- 2 ability Act (22 U.S.C. 1741b)), shall— 3 (1) compile a list, based on such information as 4 is available, of United States nationals who, during 5 the applicable period— 6 (A) were included on the list described in 7 section 7511(b)(1)(A) of the Internal Revenue 8 Code of 1986; or 9 (B) the Attorney General determined, 10 based on credible information, were taken hos- 11 tage abroad; and 12 (2) provide the list described in paragraph (1) 13 to the Secretary. 14 (d) APPLICABLE PERIOD.—For purposes of this sec- 15 tion, the term ‘‘applicable period’’ means the period— 16 (1) beginning on January 1, 2021; and 17 (2) ending on the date of enactment of this Act. 18 (e) SECRETARY.—For purposes of this section, the 19 term ‘‘Secretary’’ means the Secretary of the Treasury or 20 the Secretary’s delegate. 21 Æ VerDate Sep 11 2014 02:37 Jun 02, 2023 Jkt 039200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6301 E:\BILLS\S1679.IS S1679 kjohnson on DSK79L0C42PROD with BILLS