RETURN Act

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 9481 Introduced in House (IH)]

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119th CONGRESS
  2d Session
                                H. R. 9481

To amend the Internal Revenue Code of 1986 to improve responses by the
 Internal Revenue Service to claims for refund, and for other purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                             June 25, 2026

  Ms. Ross (for herself, Mr. Panetta, and Ms. DeLauro) introduced the
 following bill; which was referred to the Committee on Ways and Means

_______________________________________________________________________

                                 A BILL

To amend the Internal Revenue Code of 1986 to improve responses by the
 Internal Revenue Service to claims for refund, and for other purposes.

    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 ``Restoring Efficiency in Taxpayer
Updates, Refunds, and Notifications Act'' or the ``RETURN Act''.

SEC. 2. RESPONSES TO CLAIMS FOR REFUND REQUIRED.

    (a) In General.--Subsection (l) of section 6402 of the Internal
Revenue Code of 1986 is amended to read as follows:
    ``(l) Explanation of Reason for Refund Disallowance.--
            ``(1) In general.--Not later than the applicable date, the
        Secretary shall review any claim for refund, make a
        determination with respect to such claim, and, in the case of a
        disallowance of such claim (in whole or in part), provide the
        taxpayer with a detailed written explanation for such
        disallowance, which shall--
                    ``(A) be mailed to the last known address of the
                taxpayer, and
                    ``(B) in the case of any taxpayer entitled to an
                appeal of such determination, include instructions for
                appealing such disallowance to the Internal Revenue
                Service Independent Office of Appeals.
            ``(2) Failure to make timely determination.--
                    ``(A) In general.--In the case of any claim for
                refund for which the Secretary fails to satisfy the
                requirements of paragraph (1) by the applicable date,
                for purposes of determining interest on any overpayment
                for any period subsequent to such date, the overpayment
                rate (as established under section 6621(a)(1)) shall be
                increased by 1 percentage point.
                    ``(B) Limitation.--With respect to any claim for
                refund described in subparagraph (A), the amount of any
                increase in interest on any overpayment pursuant to
                such subparagraph shall not exceed $500.
                    ``(C) Adjustment for inflation.--
                            ``(i) In general.--In the case of any claim
                        for refund filed during any calendar year
                        beginning after 2026, the $500 amount in
                        subparagraph (B) shall be increased by an
                        amount equal to--
                                    ``(I) such dollar amount,
                                multiplied by
                                    ``(II) the cost-of-living
                                adjustment determined under section
                                1(f)(3) for the calendar year,
                                determined by substituting `calendar
                                year 2024' for `calendar year 2016' in
                                subparagraph (A)(ii) thereof.
                            ``(ii) Rounding.--If any amount determined
                        under clause (i) is not a multiple of $50, such
                        amount shall be rounded to the nearest multiple
                        of $50.
            ``(3) Frivolous claims.--
                    ``(A) In general.--In the case of any frivolous
                claim--
                            ``(i) paragraph (1) shall not apply, and
                            ``(ii) not later than the applicable date,
                        written notification of the denial of such
                        claim shall be mailed to the last known address
                        of the taxpayer.
                    ``(B) Definition.--For purposes of this paragraph,
                the term `frivolous claim' means a claim for refund
                which is based on a position which--
                            ``(i) a Federal court has determined to be
                        frivolous, and
                            ``(ii) the Secretary has identified as
                        frivolous for purposes of subsection (c) of
                        section 6702.
            ``(4) Applicable date.--For purposes of this subsection,
        the term `applicable date' means, with respect to any claim for
        refund--
                    ``(A) the date which is 12 months after the date of
                receipt of such claim by the Secretary, or
                    ``(B) such other date as is agreed to by the
                Secretary and the taxpayer.''.
    (b) Effective Date.--The amendment made by this section shall apply
to any claim for refund received after the date which is 12 months
after the date of enactment of this Act.
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