Washington, DC – The U.S. Senate passed Congresswoman Dina Titus (NV-01)’s End Tax Penalties on American Hostages Act. This legislation would prevent U.S. citizens who have been taken hostage or wrongfully detained abroad from incurring penalties for late tax payments while they were held. Representative Claudia Tenney (R-NY) joined Rep. Titus as cosponsor of the legislation which is now on its way to the President's desk. 

“I am pleased to report that my End Tax Penalties on American Hostages Act passed the Senate and is on its way to the President's desk,” said Rep. Titus. “It goes without saying that no one who has endured wrongful detention or been taken hostage abroad should face the additional burden of onerous tax penalties incurred through no fault of their own. This bill would eliminate that unthinkable possibility by cutting red tape in our tax code and codifying a critical support mechanism for wrongful detainees, hostages, and their families here in the United States.”

This bill extends certain federal tax deadlines for U.S. nationals who are unlawfully or wrongfully detained abroad or held hostage abroad and their spouses. The bill also allows for an abatement and refund of additional taxes, interest, and penalties assessed to such individuals for failing to meet a federal tax deadline during a period of detention.

Specifically, under the bill, the period during which a U.S. national is unlawfully or wrongfully detained abroad or held hostage abroad is disregarded in determining certain federal tax deadlines, including deadlines for

• filing a return for and paying federal income, estate, gift, employment, or excise taxes;
• a tax credit or refund claim; and
• the determination, assessment, and collection of additional taxes, interest, or penalties.

The bill requires the Department of State and the Department of Justice to annually provide the Internal Revenue Service (IRS) with lists to identify U.S. nationals who qualify for an extension.

The bill also requires the IRS to (1) abate and refund additional taxes, interest, and penalties assessed for any tax year ending during a period of detention for which an extension of a federal tax deadline is permitted; and (2) establish a program allowing U.S. nationals unlawfully or wrongfully detained abroad or taken hostage abroad (or their spouse or dependent) to claim a refund of additional taxes, interest, and penalties assessed for any tax year ending during a period of detention from 2021 to the bill’s enactment date.

The legislation’s full text can be found here.

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