On September 17, 2025, the House Ways and Means Committee unanimously advanced two bipartisan bills aimed at improving tax administration: the "Fair and Accountable IRS Reviews Act" (H.R. 5346) and the "Tax Court Improvement Act" (H.R. 5349). For tax practitioners, these bills propose significant procedural changes concerning IRS penalty assessments and Tax Court judicial authority. Both bills have garnered support from groups like the National Taxpayers Union and the Small Business & Entrepreneurship Council.

These two tax administration bills have successfully passed the Ways and Means Committee with strong bipartisan support. However, their next challenge is to be scheduled for a vote on the House floor. Despite the committee’s broad approval, there’s no guarantee that House leadership will allocate time in the House’s schedule for these bills to be brought to a vote.

Below is a technical summary of the key provisions of each bill.

H.R. 5346: The Fair and Accountable IRS Reviews Act

Sponsored by Rep. Glenn Grothman (R-WI), this bill aims to bring greater clarity and accountability to the IRS penalty approval process.[^1] The act focuses on amending IRC § 6751(b), which mandates supervisory approval for the initial determination of certain penalties.

IRC Section Modified: IRC § 6751(b).
Key Provisions:
- Timing of Supervisory Approval: The bill amends IRC § 6751(b)(1) to require that the initial determination of a penalty must be personally approved in writing by the immediate supervisor of the IRS employee making the determination before any written communication regarding the penalty is sent to the taxpayer. This includes communications that merely propose the penalty as an adjustment. This provision is designed to resolve ambiguity that has led to a circuit split among the 2nd, 9th, and 11th Circuits regarding when supervisory approval is considered timely.[^2] The bill specifies that approval must be obtained before the first formal communication of the penalty to the taxpayer.
- Definition of "Immediate Supervisor": A new paragraph, IRC § 6751(b)(3), would be added to define an “immediate supervisor” as the individual to whom the employee making the penalty determination directly reports. This addresses the current lack of a statutory definition, which has allowed for situations where penalties are approved by supervisors with little interaction with the employee proposing the penalty. The National Taxpayers Union noted that the Biden administration had more broadly defined an immediate supervisor, a practice this bill seeks to narrow.[^3]
Effective Date: The amendments apply to notices issued and penalties assessed after December 31, 2025.
Fiscal Impact: The Joint Committee on Taxation (JCT) estimates the bill will cost $117 million over ten years. An earlier JCT estimate of $120 million was corrected due to a clarification of the effective date.[^4]

H.R. 5349: The Tax Court Improvement Act

This bipartisan bill, sponsored by Reps. Nathaniel Moran (R-TX) and Terri Sewell (D-AL), would enact four significant reforms to Tax Court procedures to enhance efficiency and justice.[^5]

IRC Sections Modified/Added: IRC §§ 7456(a), 7443A, 7451(b), 7459(d), and adds new IRC § 7467.
Key Provisions:
1. Expanded Subpoena Authority: The bill amends IRC § 7456(a) to explicitly authorize Tax Court judges and special trial judges to issue subpoenas for the production of books, papers, electronically stored information, and other tangible items from any party or witness in the United States for discovery purposes, not just in connection with a scheduled hearing or deposition. The Tax Court has interpreted its current authority more narrowly, limiting such subpoenas to production at hearings or depositions.[^6] This change aims to facilitate settlements and accelerate the collection of documents.
2. Expanded Authority for Special Trial Judges: The bill amends IRC § 7443A to expand the role of special trial judges.
  - Expanded Jurisdiction: With the consent of the parties and pursuant to Tax Court rules, special trial judges could be assigned to hear any proceeding within the court’s jurisdiction, beyond the specific types of cases currently enumerated in the statute.
  - Contempt Power: A new subsection, IRC § 7443A(f), would grant special trial judges the power to punish for contempt of the Tax Court’s authority. The penalty imposed for contempt would be limited to that of a Class C misdemeanor under title 18 of the U.S. Code.
3. Judicial Disqualification Standards: The bill adds a new section, IRC § 7467, which would apply the judicial disqualification standards of 28 U.S.C. § 455 to Tax Court judges and special trial judges. This would require judges to recuse themselves in any proceeding where their impartiality might reasonably be questioned, aligning the Tax Court with the recusal standards applicable to U.S. district and appellate courts. Currently, no statute or court rule specifically requires such recusals.[^7]
4. Jurisdiction for Equitable Tolling: The bill amends IRC § 7451(b) to grant the Tax Court explicit jurisdiction to apply the doctrine of equitable tolling to the statutory deadline for filing a deficiency petition under IRC § 6213(a).
  - The court could toll the deadline if it determines, based on facts and circumstances, that equity warrants it. This change follows the Supreme Court’s decision in Boechler, P.C. v. Commissioner, which opened the door for equitable tolling in Tax Court cases, a position subsequently adopted by several circuit courts for deficiency cases.[^8]
  - The bill also adds a specific rule, in a new IRC § 7451(b)(2), to toll the filing period when a Tax Court filing location (physical or electronic) is inaccessible to the public on the due date. The tolling period would cover the days of inaccessibility plus an additional 14 days.
Effective Dates: The provisions related to special trial judges’ expanded jurisdiction take effect when the Tax Court adopts implementing rules. The provisions on equitable tolling apply to petitions filed after the date of enactment. Other provisions, such as the expanded subpoena authority, appear to be effective upon enactment.[^9]
Fiscal Impact: The JCT estimates this bill would raise (not cost) $6 million over ten years.[^10]

Prepared with assistance from NotebookLM.

[^1]: Maureen Leddy, “House Committee Advances Tax Administration Bills,” Checkpoint News, September 18, 2025

[^2]: Maureen Leddy, “House Committee Advances Tax Administration Bills,” Checkpoint News, September 18, 2025

[^3]: Katie Lobosco, “W&M Advances Bills on Tax Court Procedure and IRS Penalties,” Tax Notes Today Federal, September 18, 2025

[^4]: Maureen Leddy, “House Committee Advances Tax Administration Bills,” Checkpoint News, September 18, 2025

[^5]: Maureen Leddy, “House Committee Advances Tax Administration Bills,” Checkpoint News, September 18, 2025

[^6]: Maureen Leddy, “House Committee Advances Tax Administration Bills,” Checkpoint News, September 18, 2025, Katie Lobosco, “W&M Advances Bills on Tax Court Procedure and IRS Penalties,” Tax Notes Today Federal, September 18, 2025

[^7]: Katie Lobosco, “W&M Advances Bills on Tax Court Procedure and IRS Penalties,” Tax Notes Today Federal, September 18, 2025

[^8]: Maureen Leddy, “House Committee Advances Tax Administration Bills,” Checkpoint News, September 18, 2025

[^9]: Maureen Leddy, “House Committee Advances Tax Administration Bills,” Checkpoint News, September 18, 2025

[^10]: Maureen Leddy, “House Committee Advances Tax Administration Bills,” Checkpoint News, September 18, 2025