119-hr1983

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1983 Introduced in House

    (IH) ]

<DOC>

119th CONGRESS
 1st Session
 H. R. 1983

 To amend title 31, United States Code, to direct the Secretary of the 
 Treasury to regulate tax return preparers, and for other purposes.

_______________________________________________________________________

 IN THE HOUSE OF REPRESENTATIVES

 March 10, 2025

 Mr. Cohen introduced the following bill; which was referred to the 
 Committee on Ways and Means

_______________________________________________________________________

 A BILL

 To amend title 31, United States Code, to direct the Secretary of the 
 Treasury to regulate tax return preparers, and for other purposes.

 Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

 This Act may be cited as the ``Tax Return Preparer Accountability 
Act of 2025''.

SEC. 2. REGULATION OF TAX RETURN PREPARERS.

    (a) In General.--Subsection

    (a) of 

section 330 of title 31, United 
States Code, is amended--

    (1) by striking paragraph

    (1) and inserting the following:
 ``

    (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

    (2) in paragraph

    (2) --
        (A) by inserting ``or a tax return preparer to 
 prepare tax returns'' after ``practice'';
        (B) by inserting ``or tax return preparer'' before 
 ``demonstrate''; and
            (C) 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) .

    (b) Authority To Sanction Regulated Tax Return Preparers.--
Subsection
            (c) of 

section 330 of title 31, United States Code, is 
amended--

    (1) by striking ``before the Department'';

    (2) by inserting ``or tax return preparer'' after 
 ``representative'' each place it appears; and

    (3) in paragraph

    (4) , by striking ``misleads or threatens'' 
 and all that follows and inserting ``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.''.
            (c) Minimum Competency Standards for Tax Return Preparers.--

Section 330 of title 31, United States Code, is amended by adding at the end 
the following new subsection:
 ``

    (f) Tax Return Preparers.--
 ``

    (1) In general.--Any 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) Exemption.--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) .''.
            (d) Tax Return Preparer Defined.--

Section 330 of title 31, United 
States Code, as amended by subsection
            (c) , is amended by adding at the 
end the following new subsection:
 ``

    (g) Tax Return Preparer.--For purposes of this section--
 ``

    (1) In general.--The term `tax return preparer' has the 
 meaning given such term under 

section 7701

    (a)

    (36) of the 
 Internal Revenue Code of 1986.
 ``

    (2) Tax return.--The 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 refund.--The term `claim for refund' has 
 the meaning given such term under 

section 6696

    (e)

    (2) of such 
 Code.''.

    (e) Amendments With Respect to Identifying Number.--

    (1) In general.--

Section 6109

    (a) of the Internal Revenue 
 Code of 1986 is amended by striking paragraph

    (4) and inserting 
 the following:
 ``

    (4) Furnishing identifying number of tax return 
 preparer.--
 ``
        (A) In general.--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) .
 ``
        (B) Exception.--Subparagraph
        (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.''.

    (2) Clarification of rescission authority.--

Section 6109 of 
 such Code is amended by inserting after subsection
            (d) the 
 following new subsection:
 ``

    (e) Authority To Rescind Identifying Number of Tax Return 
Preparer.--
 ``

    (1) In general.--The 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) Records.--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) a statement of the facts and circumstances 
 relating to the determination; and
 ``
        (B) the reasons for the rescission.''.

    (3) Effective date.--The amendments made by this subsection 
 shall apply to returns filed after the date of the enactment of 
 this Act.

SEC. 3. TECHNOLOGY UPDATES AT INTERNAL REVENUE SERVICE.

    (a) Implementation of Automated Formula To Identify Taxpayers at 
Risk of Economic Hardship.--As soon as practicable, the Secretary of 
the Treasury (or the Secretary's delegate), shall implement at the 
Internal Revenue Service an algorithm that will enable the Internal 
Revenue Service to--

    (1) identify taxpayers at high risk of economic hardship 
 (as defined by the Secretary in regulations),

    (2) ask questions of taxpayers who contact the Internal 
 Revenue Service regarding a balance due for purposes of 
 identifying those at risk of hardship,

    (3) in the case of taxpayers at risk of economic hardship 
 who seek to enter into streamlined installment agreements 
 online, to notify such taxpayers of the resources available to 
 them,

    (4) determine whether to exclude taxpayers' debts from 
 automated collection treatments such as the Federal Payment 
 Levy Program, the private debt collection program, and passport 
 certification, and

    (5) rank cases for collection priority.

    (b) Security Standards for Tax Software.--The Secretary of the 
Treasury (or the Secretary's delegate), shall--

    (1) as soon as practicable, promulgate such regulations and 
 guidance as are necessary to prescribe information security 
 standards for all tax software providers, and

    (2) annually thereafter, review and update such standards.
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