Cutting Paperwork for Taxpayers Act

The Cutting Paperwork for Taxpayers Act would amend the Internal Revenue Code to exclude from gross income any interest paid on a tax overpayment to individuals or to an eligible small business. In practical terms, if you overpay your taxes and the IRS pays you interest on that overpayment, that interest would no longer be counted as taxable income. The new provision would be added as Section 139J and would apply to taxable years beginning after enactment. It also includes a clerical change to the table of contents to reflect the new section. The bill is targeted at reducing tax paperwork and simplifying the tax experience for certain taxpayers by removing the interest on tax overpayments from taxable income. It does not state retroactive effect; the change would apply prospectively once enacted.