Title: Preventing Frivolous Actions by IRS Agents Act
Policy area: Taxation

Summary:
Preventing Frivolous Actions by IRS Agents Act
This bill requires the Internal Revenue Service (IRS) to reimburse audited taxpayers whose gross income does not exceed $400,000 in the year of their audit and who have not been convicted of any crime related to the audit for the costs of such audit, including attorney's fees and court costs for civil or criminal proceedings in which the taxpayer prevails in court.

[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[S. 5014 Introduced in Senate (IS)]

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117th CONGRESS
  2d Session
                                S. 5014

 To require the Internal Revenue Service to pay for costs incurred by 
               certain persons in the course of an audit.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           September 29, 2022

Mr. Marshall (for himself and Mr. Braun) introduced the following bill; 
     which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
 To require the Internal Revenue Service to pay for costs incurred by 
               certain persons in the course of an audit.

    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 ``Preventing Frivolous Actions by IRS 
Agents Act''.

SEC. 2. FEES AND EXPENSES OF AUDITS.

    (a) In General.--Subchapter A of chapter 78 of the Internal Revenue 
Code of 1986 is amended by redesignating section 7613 as section 7614 
and by inserting after section 7612 the following new section:

``SEC. 7613. FEES AND EXPENSES OF AUDITS.

    ``(a) In General.--In the case of an eligible taxpayer, the 
taxpayer shall be entitled to the payment of any fees or other expenses 
paid or incurred by the taxpayer in the course of an audit under this 
subtitle.
    ``(b) Timing of Payment.--The payment under subsection (a) shall be 
due after the disposition of the taxpayer's case, including completion 
of any judicial proceedings.
    ``(c) Eligible Taxpayer.--For purposes of this section, the term 
`eligible taxpayer' means a taxpayer whose gross income for the taxable 
year in which the audit is commenced does not exceed $400,000, and who 
is not convicted of any crime related to the audit described in 
subsection (a) or the case described in subsection (b).''.
    (b) Clerical Amendment.--The table of sections for subchapter A of 
chapter 78 of the Internal Revenue Code of 1986 is amended by adding at 
the end the following:

``Sec. 7613. Fees and expenses of audits.''.

SEC. 3. ATTORNEY'S FEES, ETC.

    (a) In General.--Chapter 76 of the Internal Revenue Code of 1986 is 
amended by adding at the end the following new subchapter:

                   ``Subchapter F--Fees and Expenses

``Sec. 7495. Fees and expenses.

``SEC. 7495. FEES AND EXPENSES.

    ``In the case of any civil or criminal proceeding brought by or at 
the request of the Secretary in which the taxpayer prevails in court, 
the taxpayer shall be entitled to the payment of attorney's fees, court 
costs, and other expenses related to the taxpayer's defense in such 
proceeding.''.
    (b) Clerical Amendment.--The table of subchapters for chapter 76 of 
the Internal Revenue Code of 1986 is amended by adding at the end the 
following:

                  ``subchapter f--fees and expenses''.

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