No Tax on Wrongful Delay Act of 2026

S 3587, the No Tax on Wrongful Delay Act of 2026, exempts certain interest payments from being counted as taxable income. Specifically, it removes from gross income any interest paid to taxpayers under Section 6611 of the Internal Revenue Code following an IRS audit (per Section 7602), a taxpayer's lawsuit for a tax refund, or a government civil action for tax collection. This change directly affects taxpayers who receive interest payments due to delays in resolving tax disputes with the IRS. The provision applies to taxable years beginning after December 31, 2025.