Senate Passes Bill Giving Expats 120 Days to Answer IRS Math Error Notices
The U.S. Senate passed the Taxpayer Assistance and Service Act on September 30, 2026, giving taxpayers whose IRS math-error notices are mailed to an address outside the U.S. 120 days to respond, up from 60 days. The bill still needs the House, and nothing changes on your return until it becomes law. It would also require the IRS to warn you before assessing a penalty on a late or missing international information return, with 120 days to respond from abroad. The Senate approved it by unanimous consent as a substitute for H.R. 5349, after the Senate Finance Committee advanced it 26-1 on July 30. Here is what the passed version contains.
Status: Passed the Senate on September 30, 2026 > Awaiting the House, in recess until November > Requires the President’s signature. Not yet law.
Title II Holds Five Expat Provisions
Of the bill’s ten titles, Title II, named “American Citizens Abroad,” holds the five sections written for taxpayers overseas.
1. Treasury Would Study Merging FBAR Reporting
Section 201 directs the Treasury to study combining FBAR reporting with the foreign information returns filed with your tax return, including Form 8938, Form 5471, and Form 3520, and to cut duplicate requests for the same information. The National Taxpayer Advocate and Americans living abroad must be consulted. The report is due 180 days after enactment. No form is eliminated by this section.
2. GAO Would Measure the Cost of Filing Abroad
Section 202 orders the Government Accountability Office to study the compliance burden on U.S. citizens and residents living abroad, with attention to low- and moderate-income filers. The study covers foreign retirement plans treated as passive foreign investment companies, foreign currency gains, access to foreign bank accounts, and the cost of tax preparation. The GAO report is due one year after enactment, and Treasury would respond within one year after that.
3. Math Error Notices Abroad Would Get 120 Days
A math error notice is an IRS letter that corrects an arithmetic or entry problem on your return and assesses the tax without an audit. You currently have 60 days to request an abatement before the correction becomes final.
Section 203 would allow 120 days when the notice is mailed to an address outside the U.S. The mailing address decides it, so a notice sent to a U.S. address still gets 60 days, even if you live abroad. The change would apply to notices sent more than 180 days after enactment.
4. Foreign Penalties Would Need Advance Notice
Section 204 covers penalties for late or incomplete Form 5471, Form 5472, Form 926, Form 8938, Form 3520, and Form 3520-A. Before assessing one, the IRS would have to mail a notice of the proposed penalty at least 60 days ahead, or 120 days for an address outside the U.S.
Within that same window, you could ask the IRS Independent Office of Appeals to review the penalty. No assessment or collection could happen until the window closes or Appeals decides. The section would also write into law that the IRS can assess these penalties, a question the Tax Court and the D.C. Circuit split on in Farhy v. Commissioner. It would apply on enactment.
5. Fixed Form 3520 Due Dates Would Be Repealed
A 2015 transportation law set fixed due dates for Form 3520, which reports foreign gifts and trust transactions, and Form 3520-A, the annual return of a foreign trust with a U.S. owner. Section 205 would repeal those dates, allowing the Treasury to set new deadlines by regulation. It would apply to returns for tax years beginning after December 31, 2026. Until Treasury acts, the current due dates in the IRS instructions apply.
Detained Americans Would Get Deadline Relief
Title VIII would stop the clock on filing and payment deadlines for Americans held hostage or wrongfully detained abroad, and for their spouses. Treasury would also establish a program to refund or abate penalties and interest incurred during the detention period.
Today’s Rules Compared With the Bill
| Provision | Today | Under the bill |
|---|---|---|
| Math error window, notice mailed abroad | 60 days | 120 days |
| Notice before a foreign information return penalty | Generally, none; appeal after assessment | 60 days, or 120 days abroad, with Appeals review first |
| Form 3520 and 3520-A due dates | Fixed by the 2015 law | Set by Treasury regulation |
| Personal currency gain exclusion | $200 | No change |
| Form 1116 exemption | $300, or $600 jointly | No change |
Currency and Form 1116 Relief Was Cut
The bill, as introduced in February, included two more changes: a higher personal currency gain exclusion with relief for refinancing a foreign mortgage, and a higher threshold for claiming the foreign tax credit without Form 1116. The Finance Committee left both out of its July 28 Chairman’s Mark, and neither is in the version that passed. The current $200 currency exclusion and the Form 1116 exemption of $300, or $600 jointly, per the IRS, still apply.
The Bill Now Goes to the House
The House is in recess until November and has not scheduled the bill. Track the bill’s status on Congress.gov.
Frequently Asked Questions
The Taxpayer Assistance and Service Act, or TAS Act, is a bipartisan federal tax administration bill from Senate Finance Chairman Mike Crapo and Ranking Member Ron Wyden. It covers IRS customer service, Tax Court procedure, tax preparer penalties, and a title of provisions for Americans living abroad.
No. The Senate passed it on September 30, 2026, but the House must also pass it, and the President must sign it. Every change described here is proposed.
It would apply to math error notices sent more than 180 days after the bill becomes law. Any notice you receive before then is subject to the 60-day window.
Wondering whether any of this changes your filing?
This article describes a bill passed by the Senate. It is not law, and its provisions may change or fail to pass. All figures for current law reflect rules in effect as of publication. The information in this article is for general informational purposes only and does not constitute tax, legal, or financial advice. Tax rules are complex and change frequently. Consult a qualified tax professional regarding your specific situation before taking any action.
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