H.R. 5349, Tax Court Improvement Act

H.R. 5349 would make several changes to the operations of the Tax Court (USTC). The bill would authorize special trial judges to hear and render judgment in any case within the jurisdiction of the USTC, with the consent of the parties to a case, and would allow special trial judges to order a limited set of punishments for contempt of court. The bill also would allow the court to consider a motion for “equitable tolling” in deficiency cases, meaning that, in certain circumstances, the court could extend deadlines for taxpayers to contest USTC decisions concerning tax liability. H.R. 5349 would allow the USTC to issue subpoenas for evidence during the discovery process whether or not in connection with a scheduled hearing. Finally, the bill would require USTC judges and special trial judges to follow the same rules of mandatory recusal that apply to U.S. district and appellate judges.

The estimated budgetary effect of H.R. 5349 is shown in Table 1. The costs of the legislation fall within budget function 800 (general government).

CBO and the staff of the Joint Committee on Taxation (JCT) assume that H.R. 5349 will be enacted by the end of 2025.

The Congressional Budget Act of 1974, as amended, stipulates that revenue estimates provided by JCT are the official estimates for all tax legislation considered by the Congress. CBO therefore incorporates such estimates into its cost estimates of the effects of legislation. The revenue estimates for the bill were provided by JCT.[1]

JCT estimates that enacting the bill would increase revenues, on net, by $6 million over the 2026-2035 period. JCT estimates that the provision allowing special trial judges to hear additional cases and granting them expanded authority would increase revenues by $9 million over the 2026-2035 period. Partially offsetting that increase, the provision allowing equitable tolling in additional cases would reduce revenues by $3 million over the same period.

H.R. 5349 would not significantly change the USTC’s operations; therefore, CBO estimates that implementing H.R. 5349 would increase the USTC’s administrative costs by less than $500,000 over the 2026-2030 period. Any related spending would be subject to the availability of appropriated funds.

JCT’s estimates of the budgetary effects of H.R. 5349 are subject to uncertainty: They are based on underlying projections and other factors that could change significantly. In particular, the estimates rely in part on CBO’s economic projections for the next decade under current law and on expectations of the way that taxpayers might respond to changes in tax law.

The CBO staff contacts for this estimate are John Iselin and Matthew Pickford. The estimate was reviewed by H. Samuel Papenfuss, Deputy Director of Budget Analysis, and John McClelland, Director of Tax Analysis.