Taxpayer Transparency and Notice Act

119th Congress Introduced by John Cornyn

The bill requires the IRS to send at least quarterly notices to taxpayers with unpaid balances, including estimated penalties/interest and available assistance programs.

Introduced in Senate

Summary of Bill: S.5072 — Taxpayer Transparency and Notice Act (119th Congress)

Purpose

To amend the Internal Revenue Code of 1986 to require the Internal Revenue Service (IRS) to send quarterly notices to taxpayers with unpaid balances, replacing the existing annual notice framework.

Key Provisions

Annual to Quarterly Notices: Section 7524’s heading changes from “Annual Notice” to “Notice,” and the requirement shifts from not less than annually to not less than quarterly.

Content of Notices: The quarterly notice must include:

(1) An estimate of the amount of penalties and interest that may accrue if the delinquent tax debt is not fully paid within the remaining period under section 6502(a).
(2) Information about programs and services that can provide assistance to the taxpayer.

Exceptions: The quarterly notices do not apply:

(1) While an installment agreement under section 6159(a) or an accepted offer-in-compromise under section 7122 is in effect.
(2) For a taxpayer the Secretary determines has non-collectible tax debt (as described in section 6343(e)).

Technical Corrections: The table of sections for chapter 77 is amended to replace the old reference to section 7524 with a new item: “Sec. 7524. Notice of tax delinquency.”

Effective Date: The changes take effect 24 months after the date of enactment of the Act.

Who/What is Affected

Taxpayers with delinquent or unpaid federal income (and related) tax debts who are under IRS collection activity.

IRS process and notices for delinquent accounts will be quarterly instead of annually, with added informational content.

Taxpayers currently in payment arrangements (installment agreements or offers-in-compromise) are exempt from the quarterly notice requirement while those arrangements are in effect.

Taxpayers deemed non-collectible by the IRS would not receive the quarterly notices.

Procedural and Timeline Aspects

Introduction: July 22, 2026, in the Senate by Senator Lujan (with Senator Cornyn as a co-sponsor).

Referral: Referred to the Senate Committee on Finance.

Effective Date: 24 months after enactment.

Implementation Implication: IRS would need to implement an ongoing quarterly notice system, update wording, and ensure the notices include penalty/interest estimates and available assistance programs.

Potential Impacts and Considerations

Increased frequency of notices could raise taxpayer awareness of delinquent balances and potential penalties, potentially influencing timely payment or engagement with IRS programs.

The added content about estimated penalties/interest and available assistance may provide clearer disclosure and options for taxpayers.

Exemptions ensure that taxpayers with active payment arrangements or irrecoverable debts are not subjected to unnecessary or misleading notices.

Administrative burden on IRS to produce quarterly notices and calculate near-term penalty/interest projections.

Note: This summary reflects the bill text as introduced and does not account for amendments that may be made during the legislative process.