Section 1. Short title
This Act may be cited as the No Tax on Wrongful Delay Act of 2026.
(a) In general
Part III of subchapter B of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting before section 140 the following new section:
Section 139M. Interest paid to taxpayers following an audit or litigation
Gross income shall not include any interest which, pursuant to section 6611, is required to be paid upon any overpayment in respect of any internal revenue tax following—
(1) an examination pursuant to the provisions of section 7602,
(2) any suit or proceeding brought by the taxpayer for the credit or refund of taxes, or
(3) any civil action commenced by the United States for the collection or recovery of taxes.
(b) Conforming amendment
The table of sections for part III of subchapter B of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting before the item relating to section 140 the following new item:
(c) Effective date
The amendments made by this section shall apply to taxable years beginning after December 31, 2025.