Tax Return Preparer Accountability Act of 2025
HB1983, the Tax Return Preparer Accountability Act of 2025, would expand the Treasury Department’s authority to regulate tax return preparers under 31 U.S.C. section 330. It would explicitly authorize Treasury to regulate both representatives before the Department and paid tax return preparers, and it would allow Treasury to impose minimum competency standards on preparers, including an identifying number requirement, examinations, annual continuing education, and background checks. The bill also creates an exemption for preparers already subject to comparable federal or state licensing, and for supervised staff working under attorneys, CPAs, or enrolled agents in certain settings.
The bill further amends Internal Revenue Code section 6109 to require tax returns and refund claims prepared by covered preparers to include the preparer’s identifying number, while giving Treasury authority to rescind that number for incompetence or disreputable conduct after notice and hearing. In addition, it directs Treasury and the IRS to implement an automated algorithm to identify taxpayers at risk of economic hardship and to use that information in collection and installment-agreement processes. It also requires the IRS to establish and annually update information security standards for tax software providers.
If enacted, the bill would change federal tax administration by broadening Treasury’s oversight of paid tax return preparers and adding new federal competency, identification, and disciplinary requirements. It would also amend the Internal Revenue Code to tie preparer identification numbers more directly to filed returns and refund claims, and it would create a mechanism to revoke those numbers in appropriate cases. Separately, it would require IRS operational changes related to hardship screening, collection prioritization, and tax software cybersecurity standards, affecting preparers, software vendors, and taxpayers interacting with IRS collection systems.
The available record shows no committee transcript and no recorded votes, so there is no formal evidence of bipartisan support or opposition in the materials provided. Based on the bill text, the measure appears framed as a consumer-protection and tax-administration reform proposal, emphasizing preparer accountability, taxpayer hardship protections, and software security. The overall tone of the legislation is regulatory and administrative rather than punitive.
The main likely points of contention are the scope of federal regulation over tax return preparers, the cost and burden of examinations, continuing education, background checks, and identifying-number requirements, and whether Treasury should have authority to rescind preparer credentials. Another possible area of debate is the bill’s directive to use an algorithm to identify taxpayers at risk of economic hardship and to influence collection actions, which could raise concerns about accuracy, privacy, and due process. Tax software security mandates may also draw scrutiny from industry stakeholders over compliance costs and implementation details.