On July 30, 2026 the Senate Finance Committee voted to report the TAS Act favorably. The Democrats Abroad Taxation Task Force endorsed this underrated piece of legislation when the bill was first introduced. Since, the bill has undergone a number of changes both encouraging and discouraging, which are worth highlighting.
What is the TAS Act?
The TAS Act is a bipartisan tax bill that stands for the Taxpayer Assistance and Service Act introduced in February this year. The bill includes commonsense fixes to IRS procedures and administration including a number of longstanding proposals from the National Taxpayer Advocate and is made up of 10 sections; the second section specially aimed at addressing tax problems for Americans abroad.
What happened when the bill advanced through the Senate Finance Committee?
The Committee mark-up made a number of modifications to the Americans abroad section of the bill. Notably, Sec. 203. Simplification of Currency Exchange Rules and Sec. 204. Increase in Threshold for Simplified Foreign Tax Credit Rules and Reporting were removed. We were particularly disappointed to see Sec. 203. Simplification of Currency Exchange Rules removed given this would have brought immediate tax relief to common foreign currency translation rules which often unfairly impact Americans abroad. This provision would have corrected the tax code to prevent the recognition of a “phantom gain” on the sale or remortgage of a non-US home. The Taxation Task Force is pursuing how to get the provision added back into the House version of the TAS Act, and will update as and when progress is made on that front.
What is the Fairness in Foreign Filing Act?
A bipartisan amendment called the Fairness in Foreign Filing Act by Senators Whitehouse (D-RI) and Cassidy (R-LA) was added to the TAS Act during the Committee mark-up. This amendment has two provisions of particular importance for Americans abroad.
First, it requires the IRS to create an appeals process for international information reporting (IIR) where the IRS must provide notice before issuing a late filing penalty and give taxpayers abroad 120 days to respond or appeal.
This process would apply to the late filing of the following commonly filed international information reporting forms:
- Forms 3520, Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts
- Form 3520-A, Annual Information Return of Foreign Trust With a U.S. Owner
- Form 5471, Information Return of U.S. Persons With Respect To Certain Foreign Corporations
- Form 8938, Statement of Specified Foreign Financial Assets (AKA the FATCA form)
Second, the amendment gives the Treasury Secretary the authority to set the filing deadline for these forms. For example, Forms 3520 and 3520-A currently have a March 15 deadline, which is not in line with the standard April 15 deadline. We believe the intent of this provision is to give taxpayers more time to file these forms to reduce the incidence of late filing. We will be closely watching when Treasury issues proposed regulations to modify the filing deadline and will advocate to align the deadline with the tax return deadline (June 15 for Americans abroad, with the ability to request extensions to October or December).
We hope that the combination of these legislative changes will result in less Americans abroad being unfairly hit by late filing penalties.
Note that this legislation also includes language that would supersede the tax court rulings in Farhy v. Commissioner and Mukhi v. Commissioner. This will make all international information report penalties “assessable,” which means the IRS would be able to automatically assess international information reporting penalties. However, taxpayers will have 120 days to appeal prior to the automatic assessment.
When will this bill pass?
There are still a number of steps required to turn the bill into law. As of July 30, the Senate Finance Committee, which is the committee responsible for tax bills in the Senate, voted to favorably report the amended bill. The bill will then need to be passed by the full Senate. Additionally, the bill needs to pass in the House of Representatives before being signed into law by the President. That said, the fact the bill advanced through the Senate Finance Committee is a significant milestone given that no other piece of tax legislation specific to Americans abroad has ever advanced this far through the lawmaking process.
We are encouraged to see this bipartisan bill include a section specific to American abroad tax issues moving through Congress in what has been a historically ineffective Congressional session. This is evidence that it is still possible to pass legislation during an unusually unproductive Congress and that American abroad tax issues are not controversial, given these small changes can have such a big impact on the lives of Americans abroad.
What can Americans abroad do to help the bill pass?
Please contact both of your Senators and your House Representative to ask they vote for the bill when it comes to a full vote. Instructions for how to contact your Members of Congress can be found here.
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