HR10461-118

1. Short title This Act may be cited as the Taxpayer Protection and Preparer Proficiency Act of 2024.

2. Regulation of tax return preparers Subsection (a) of section 330 of title 31, United States Code, is amended— by striking paragraph (1) and inserting the following: regulate— the practice of representatives of persons before the Department of the Treasury; and the practice of tax return preparers; and in paragraph (2)— by inserting or a tax return preparer to prepare tax returns after practice; by inserting or tax return preparer before demonstrate; and by inserting or in preparing their tax returns, claims for refund, or documents in connection with tax returns or claims for refund after cases in subparagraph (D). Subsection (c) of section 330 of title 31, United States Code, is amended— by striking before the Department; by inserting or tax return preparer after representative each place it appears; and in paragraph (4), by striking misleads or threatens and all that follows and inserting misleads or threatens— any person being represented or any prospective person being represented; or any person or prospective person whose tax return, claim for refund, or document in connection with a tax return or claim for refund, is being or may be prepared. Section 330 of title 31, United States Code, is amended by adding at the end the following new subsection: Any tax return preparer shall demonstrate minimum competency standards under this subsection by— obtaining an identifying number for securing proper identification of such preparer as described in section 6109(a)(4) of the Internal Revenue Code of 1986; satisfying any examination and annual continuing education requirements as prescribed by the Secretary; and completing a background check administered by the Secretary. The Secretary shall exempt tax return preparers who have been subject to comparable examination, continuing education requirements, and background checks administered by the Secretary or any comparable State licensing program. Such exemption shall extend directly to individuals who are supervised by such preparers and are not required to secure an identification number under section 6109(a)(4). The Secretary shall issue regulations under this section reinstating the Registered Tax Return Preparer Program. Examination of tax return prepares under such program shall be limited to a one-time, basic individual income tax examination and the annual continuing education requirement under such program shall not exceed 15 hours. Section 330 of title 31, United States Code, as amended by subsection (c), is amended by adding at the end the following new subsection: For purposes of this section— The term tax return preparer has the meaning given such term under section 7701(a)(36) of the Internal Revenue Code of 1986. The term tax return has the meaning given to the term return under section 6696(e)(1) of the Internal Revenue Code of 1986. The term claim for refund has the meaning given such term under section 6696(e)(2) of such Code. Section 6109(a) of the Internal Revenue Code of 1986 is amended by striking paragraph (4) and inserting the following: Any return or claim for refund prepared by a tax return preparer shall bear such identifying number for securing proper identification of such preparer, his employer, or both, as may be prescribed. For purposes of this paragraph, the terms return and claim for refund have the respective meanings given to such terms by section 6696(e). Subparagraph (A) shall not apply with respect to the preparation of any return or claim for refund by a tax return preparer if— such return or claim is prepared by such preparer while such preparer is employed by an attorney, certified public accountant, or enrolled agent firm, and such preparer prepares such return or claim under the supervision and direction of a tax return preparer who signs such return or claim and is an attorney, certified public accountant, or enrolled agent. Section 6109 of such Code is amended by inserting after subsection (d) the following new subsection: The Secretary may rescind an identifying number issued under subsection (a)(4) if— after notice and opportunity for a hearing, the preparer is shown to be incompetent or disreputable (as such terms are used in subsection (c) of section 330 of title 31, United States Code); and rescinding the identifying number would promote compliance with the requirements of this title and effective tax administration. If an identifying number is rescinded under paragraph (1), the Secretary shall place in the file in the Office of the Director of Professional Responsibility the opinion of the Secretary with respect to the determination, including— a statement of the facts and circumstances relating to the determination; and the reasons for the rescission. Not later than 18 months after the date of the enactment of this Act, the Comptroller General shall conduct a study and submit to Congress a report on the sharing of information between the Secretary of the Treasury and State authorities, as authorized under section 6103(d) of the Internal Revenue Code of 1986, regarding identification numbers issued to paid tax return preparers and return preparer minimum standards. The study and report described in paragraph (1) shall include an analysis of the impact that increased information sharing between Federal and State authorities would have on efforts to enforce minimum standards on paid tax return preparers. (1)regulate—(A)the practice of representatives of persons before the Department of the Treasury; and(B)the practice of tax return preparers; and; and misleads or threatens—(A)any person being represented or any prospective person being represented; or(B)any person or prospective person whose tax return, claim for refund, or document in connection with a tax return or claim for refund, is being or may be prepared.. (f)Tax return preparers(1)In generalAny tax return preparer shall demonstrate minimum competency standards under this subsection by—(A)obtaining an identifying number for securing proper identification of such preparer as described in section 6109(a)(4) of the Internal Revenue Code of 1986;(B)satisfying any examination and annual continuing education requirements as prescribed by the Secretary; and(C)completing a background check administered by the Secretary.(2)ExemptionThe Secretary shall exempt tax return preparers who have been subject to comparable examination, continuing education requirements, and background checks administered by the Secretary or any comparable State licensing program. Such exemption shall extend directly to individuals who are supervised by such preparers and are not required to secure an identification number under section 6109(a)(4).(3)Reinstatement of Registered Tax Return Preparer ProgramThe Secretary shall issue regulations under this section reinstating the Registered Tax Return Preparer Program. Examination of tax return prepares under such program shall be limited to a one-time, basic individual income tax examination and the annual continuing education requirement under such program shall not exceed 15 hours. . (g)Tax return preparerFor purposes of this section—(1)In generalThe term tax return preparer has the meaning given such term under section 7701(a)(36) of the Internal Revenue Code of 1986.(2)Tax returnThe term tax return has the meaning given to the term return under section 6696(e)(1) of the Internal Revenue Code of 1986.(3)Claim for refundThe term claim for refund has the meaning given such term under section 6696(e)(2) of such Code.. (4)Furnishing identifying number of tax return preparer(A)In generalAny return or claim for refund prepared by a tax return preparer shall bear such identifying number for securing proper identification of such preparer, his employer, or both, as may be prescribed. For purposes of this paragraph, the terms return and claim for refund have the respective meanings given to such terms by section 6696(e).(B)ExceptionSubparagraph (A) shall not apply with respect to the preparation of any return or claim for refund by a tax return preparer if—(i)such return or claim is prepared by such preparer while such preparer is employed by an attorney, certified public accountant, or enrolled agent firm, and(ii)such preparer prepares such return or claim under the supervision and direction of a tax return preparer who signs such return or claim and is an attorney, certified public accountant, or enrolled agent.. (e)Authority To rescind identifying number of tax return preparer(1)In generalThe Secretary may rescind an identifying number issued under subsection (a)(4) if—(A)after notice and opportunity for a hearing, the preparer is shown to be incompetent or disreputable (as such terms are used in subsection (c) of section 330 of title 31, United States Code); and(B)rescinding the identifying number would promote compliance with the requirements of this title and effective tax administration.(2)RecordsIf an identifying number is rescinded under paragraph (1), the Secretary shall place in the file in the Office of the Director of Professional Responsibility the opinion of the Secretary with respect to the determination, including—(A)a statement of the facts and circumstances relating to the determination; and(B)the reasons for the rescission..