IRS must give taxpayers 45 days' notice before seeking their financial records

What it does

This bill amends the tax code to require the IRS to notify taxpayers in advance when it plans to seek information about them from third parties (banks, employers, etc.), and to give taxpayers at least 45 days to provide that information themselves before the IRS contacts those third parties. The IRS must specify exactly what information it is seeking and can only bypass this requirement if it determines the information is necessary and cannot reasonably come from the taxpayer.

Why we flagged it

The bill's operative mechanism is a procedural safeguard: it mandates advance notice, specificity, and a response window before the IRS contacts third parties. This is a transparency and due-process measure, not a tax cut or exemption.

What the text implies

• The 45-day notice period may slow IRS investigations into complex fraud or evasion schemes, potentially delaying detection of coordinated tax avoidance.
• The 'reasonably be provided by the taxpayer' standard is subjective and may become a litigation flashpoint — taxpayers could argue the IRS should have asked them first for nearly any category of information.
• The exception for information the Secretary deems 'necessary' is broad and undefined; the IRS may use it to bypass the notice requirement in high-stakes cases, creating a two-tier system.

Section numbers refer to the bill text the analysis read — linked under Primary records below.

Who it affects

Ordinary taxpayers gain procedural rights: advance notice of third-party inquiries, specificity about what the IRS seeks, and a 45-day window to respond before the IRS contacts banks, employers, or other entities. This reduces surprise audits, protects privacy, and gives taxpayers a fair chance to explain or provide information directly rather than having the IRS gather it covertly.

Named in the bill

Internal Revenue Service (IRS), Secretary of the Treasury, IRC Section 7602(c), Third-party information providers (banks, employers, financial institutions)

Where it stands

1 cosponsor: 1 Democrats.

• Dec 5, 2025 — Introduced · Congress.gov: “Introduced in House”
• Dec 5, 2025 — Referred to House Committee on Ways and Means and Senate Committee on Finance · Congress.gov: “Referred to the House Committee on Ways and Means”
• Dec 10, 2025 — Markup held in committee · Congress.gov: “Committee Consideration and Mark-up Session Held”
• Dec 10, 2025 — Reported out of committee · Congress.gov: “Ordered to be Reported in the Nature of a Substitute (Amended) by the Yeas and Nays: 41 - 0”
• Apr 27, 2026 — Passed the House · Congress.gov: “On motion to suspend the rules and pass the bill, as amended Agreed to by voice vote. (text: CR H3106)”
• Apr 27, 2026 — Floor vote scheduled · Congress.gov: “Mr. Smith (MO) moved to suspend the rules and pass the bill, as amended”

Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.

Money around this bill

2 lobbying clients named this bill on 2 disclosure filings across 2 quarters, Dec 2025 to Jun 2026. Those filings disclosed $60,000 in lobbying spend. A filing names 50 bills on average, so that figure is what each filing reported, not a share belonging to this bill.

More lobbying clients named this bill than 41% of bills with at least one filing.

W. Steube, the sponsor, reported $646,500 in PAC receipts in the 2026 cycle.

• National Taxpayers Union — $30,000 on 1 filing
• Small Business & Entrepreneurship Council (sbe Council) — $30,000 on 1 filing

Lobbying Disclosure Act filings through Jul 20, 2026. A filing shows who paid to lobby on a bill it names, not what changed.