To amend the Internal Revenue Code of 1986 to penalize improper compliance with certain taxpayer requirements, and for other purposes.
Sponsors
Legislative Progress
IntroducedMr. Panetta (for himself and Mr. Steube) introduced the following …
Summary
What This Bill Does
This bill substantially increases regulation and penalties for tax return preparers to protect taxpayers from incompetent or fraudulent preparers. It increases civil penalties 5-fold (from \ to \ for most violations), creates new felony offenses for willful misuse of preparer ID numbers (up to 2 years imprisonment), and gives the IRS authority to deny, suspend, or revoke preparer tax identification numbers. It also establishes education and background check requirements for tax preparers.
Who Benefits and How
Taxpayers benefit from increased protection against fraudulent or incompetent tax preparers. The IRS gains new enforcement tools to remove bad actors from the tax preparation industry. Certified public accountants, enrolled agents, and licensed attorneys (specified practitioners) benefit from reduced competition from unregulated preparers and continue to be exempt from some requirements. Banks that properly deposit refund checks for taxpayers are exempted from check-cashing penalties.
Who Bears the Burden and How
Tax return preparers face dramatically increased penalties: civil penalties rise from \ to \ per violation, and new \,000 penalties for refund misappropriation. Willful misuse of preparer IDs becomes a felony with up to \,000 fines and 2 years imprisonment. Preparers must meet new education requirements (up to 18 hours annually) and pass background checks. Those with suspended or revoked state licenses face federal denial of preparer IDs.
Key Provisions
- Increases civil penalties from \ to \ per violation, caps from \,000 to \,000-\,000
- Creates felony offense for willful misuse of preparer IDs (up to \,000 fine, 2 years imprisonment)
- IRS authority to deny, suspend, or revoke preparer tax identification numbers
- Requires background checks and up to 18 hours annual continuing education
- Exempts specified practitioners (CPAs, attorneys, enrolled agents) from some requirements
Evidence Chain:
This summary is derived from the structured analysis below. See "Detailed Analysis" for per-title beneficiaries/burden bearers with clause-level evidence links.
Primary Purpose
Strengthens regulation of tax return preparers by increasing penalties for improper conduct, creating new felony offenses for willful misuse of preparer identification numbers, and giving the IRS authority to deny, suspend, or revoke preparer tax identification numbers.
Policy Domains
Legislative Strategy
"Strengthen IRS regulatory authority over tax preparers through dramatically increased penalties, new criminal offenses, and administrative authority to exclude bad actors from the industry."
Bill Structure & Actor Mappings
Who is "The Secretary" in each section?
- "the_secretary"
- → Secretary of the Treasury
- "the_secretary"
- → Secretary of the Treasury
- "the_secretary"
- → Secretary of the Treasury
Key Definitions
Terms defined in this bill
The Secretary of the Treasury or the Secretary's delegate.
A person who originates the electronic submission of one or more returns or claims for refund on behalf of other taxpayers.
A certified public accountant, attorney, or enrolled agent who is in good standing and authorized to represent persons before the Treasury, and whose professional license has not been revoked.
We use a combination of our own taxonomy and classification in addition to large language models to assess meaning and potential beneficiaries. High confidence means strong textual evidence. Always verify with the original bill text.
Learn more about our methodology