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Congress·In Committee·12 months ago

Congress moves to pause IRS deadlines and refund late fees for Americans held hostage abroad

Also known as: Stop Tax Penalties on American Hostages Act of 2025

Legislative Progress

✓ Filed
Review
House
Senate
President

Impacts

Mixed Impacts(1)
Federal Employee
Neutral
Positive Impacts(1)
Child Tax Credit
Helps

Key Points

  • Gives Americans who are wrongfully detained or held hostage abroad extra time to file taxes and handle other IRS deadlines while they are detained.
  • Stops IRS interest and late penalties from piling up during the time the person is detained, and extends the same protection to the person’s spouse.
  • Requires the State Department and Justice Department to regularly give Treasury lists of eligible hostages/detainees so the IRS can apply the relief correctly.
  • Refunds or wipes out certain interest and late fees that were charged or paid before the person was officially identified as eligible.
  • Creates an application program by Jan. 1, 2026, and gives people more time to claim refunds, including for penalties tied to missed deadlines dating back to Jan. 1, 2021.
TaxesConsumer ProtectionForeign Policy

Milestones

2 milestones2 actions
Mar 5, 2025House

Referred to the House Committee on Ways and Means.

Mar 5, 2025

Introduced in House

What Happens Next

Projected impacts based on AI analysis

Right after enactment, for taxable years ending after enactment

IRS deadline “pause” starts applying for future tax years after the law is signed

If a qualified person is detained/held hostage, IRS clocks for key tax actions can stop during the detention period, reducing late penalties and interest

After enactment and before/around Jan 1, 2026

Treasury/IRS updates databases so deadline and penalty rules apply automatically

Fewer families should have to fight penalties one-by-one; the IRS can stop penalty/interest buildup once a person is flagged as eligible

1-year period starts when notice is provided

One-year special window to file refund claims after IRS notice

Even if normal tax refund deadlines have passed, eligible people get until 1 year after the IRS notice to claim refunds for covered penalties/interest

Related News

4 articles
Sen. Chris Coons (Press Release)·about 1 year ago

Senators Coons, Rounds reintroduce legislation to protect American hostages and wrongful detainees from tax penalties

Announcement of reintroduction of the Stop Tax Penalties on American Hostages Act, outlining relief from IRS penalties/interest and tax-deadline postponements for eligible detainees and their families.

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Sen. Mike Rounds (Press Release)·almost 2 years ago

Senate Clears Rounds, Coons Stop Tax Penalties on American Hostages Act

Statement on Senate passage of an earlier version of the Stop Tax Penalties on American Hostages Act; provides context on the policy’s intent and mechanics.

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Sen. Chris Coons (Press Release)·over 1 year ago

ICYMI: Wall Street Journal publishes Senator Coons op-ed about easing financial burdens for Americans held hostage or wrongfully detained abroad

Summary and excerpts of an op-ed urging passage of legislation to reduce financial burdens—explicitly including the Stop Tax Penalties on American Hostages Act.

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Source Information

Document Type

Congressional Bill

Official Title

Stop Tax Penalties on American Hostages Act of 2025

Bill NumberHR 1868
Congress119th Congress
ChamberHouse of Representatives
Latest ActionReferred to the House Committee on Ways and Means.

Sponsor

Cosponsors

(14)
D: 8R: 6

Analysis generated by AI. While we strive for accuracy, this should not be considered legal or professional advice. Always verify information with official government sources.