This is the eighth in a series of ten client alerts summarizing the key provisions of the Taxpayer Assistance and Service Act (the “TAS Act”), a bipartisan legislative package introduced on February 26, 2026, by Senators Crapo and Wyden to improve service and administration at the Internal Revenue Service (“IRS”). This alert addresses Title VIII of the proposed legislation, which focuses on Hostages. For a general overview of the legislation, please refer to the Introduction of this series and summaries of Titles I, II, III, IV, V, VI and VII.
Title VIII of the TAS Act provides deadline and payment relief to individuals who are hostages or wrongfully detained abroad.
Section 801
Section 801 adds Section 7511 to the Internal Revenue Code, which extends certain tax deadlines for individuals who are held hostage or wrongfully detained abroad. The period that the individual is detained is disregarded for tax purposes. This means that the deadline for filing returns, paying tax, and claiming refunds is suspended for the entire period the individual is detained. Section 801 makes clear that interest and penalties will also not accrue during this period. The relief offered by Section 801 extends to the spouses of detained individuals.
By January 1, 2027, the Secretary of State and Attorney General must provide a list of individuals who are defined as detainees under Section 302 of the Robert Levinson Hostage Recovery and Hostage-Taking Accountability Act or the Hostage Recovery Fusion Cell. For detained individuals who were already assessed penalties before the detainee designation is made, the IRS is required to abate and refund any tax, interest, and penalties paid.
Section 802
Section 802 provides for retroactive relief to individuals who were detained beginning January 1, 2021. Those individuals can apply for a refund of any penalties or interest paid if tax deadlines or payments were missed. The IRS is required to notify detainees of their right to claim a refund. Individuals have one year to file a claim for refund upon receiving notice from the IRS.
Conclusion
Title VIII provides hostages or detainees with rights tax relief similar to that offered under IRC § 7508 to members of the Armed Force. However, Title VIII goes further by creating a specific refund regime and requiring the IRS to proactively to reach out to hostages to inform them of their rights.