Federal Receivership Fairness Act

The Federal Receivership Fairness Act would add a new provision to the Internal Revenue Code giving courts that oversee receivership proceedings (in federal or state courts) the authority to determine the amount and legality of federal taxes, penalties, and related additions for the receivership estate. This creates a formal, court-driven process to resolve tax liabilities during administration of a receivership, potentially bypassing or accelerating traditional IRS adjudication. The bill also sets limits on when the court may make such determinations, outlines how a receiver can request a determination, and specifies how tax liabilities may be paid and later assessed against the estate or its successors. It includes a broad waiver of sovereign immunity to allow court action against governmental tax authorities and provides an option to move the case to federal court if state court jurisdiction is questioned. The act would apply to returns and assessment periods open as of enactment and to new filings thereafter. In short, the bill creates a formal pathway for courts to resolve federal tax issues within receivership cases, with specific procedural steps, protections for the debtor’s estate, and mechanisms to enforce or offset tax obligations through the receivership process.