US SB3587

Excludes from gross income any interest the IRS pays to taxpayers on overpayment refunds following an audit or tax litigation where the taxpayer prevailed

Covers interest arising from IRS examinations under section 7602, taxpayer suits for tax credits or refunds, and civil actions by the United States for tax collection or recovery

Creates new Section 139M in the Internal Revenue Code of 1986

Applies to taxable years beginning after December 31, 2025

Introduced by Senator Blackburn on January 7, 2026, and referred to the Senate Committee on Finance