Taxpayer Protection and Preparer Proficiency Act
HB6323, the Taxpayer Protection and Preparer Proficiency Act, would substantially expand federal oversight of paid tax return preparers and related tax-filing intermediaries. The bill increases civil penalties for a range of preparer misconduct, including failing to use a valid preparer identification number, using another person’s number, using an invalid electronic filing identification number, improperly altering returns, and misappropriating taxpayer refunds or advance payments. It also creates a new felony offense for willful misuse or misappropriation of a preparer identifying number, with criminal fines and possible imprisonment.
The bill would also tighten the rules for obtaining and keeping a preparer tax identification number (PTIN). The IRS would be directed to maintain a suitability-and-education-based PTIN program, with background checks, ethics and tax-law education requirements, and authority to deny, suspend, revoke, or reinstate PTINs based on misconduct, incompetence, disreputable conduct, or violations of Treasury practice rules. In addition, the bill requires identifying numbers on certain offers-in-compromise prepared for compensation, directs the IRS to create a correction program for inadvertent filing errors involving identifying numbers, and mandates public reporting on common preparer errors and penalty reasons.
The bill would amend multiple provisions of the Internal Revenue Code, especially sections 6109, 6695, 6696, 7122, and chapter 75, and would also amend 31 U.S.C. section 330 governing practice before the Treasury Department. It would raise penalty amounts, broaden the definition of tax return preparer, add new disclosure and reporting authorities, and create new administrative procedures for PTIN issuance, suspension, revocation, appeals, and public posting of final determinations. The measure would affect paid tax preparers, electronic return originators, supervised preparers, practitioners such as CPAs, attorneys, and enrolled agents, and taxpayers who rely on preparers for returns, refund claims, and offers-in-compromise.
No committee transcript or vote record is provided, so there is no direct evidence of floor or committee sentiment. Based on the bill text, the measure appears to be framed as a taxpayer-protection and compliance-enforcement bill, suggesting support for stronger oversight of preparers and fraud prevention. The inclusion of correction opportunities, reasonable-cause exceptions, transition rules, and grandfathering provisions also indicates an effort to balance enforcement with administrative fairness and implementation flexibility.
The main points of contention are likely to be the bill’s expanded federal control over tax preparer licensing and discipline, higher monetary penalties, and new criminal exposure for preparers who misuse identifying numbers or mishandle refunds. The most affected parties would be paid tax return preparers, electronic filing businesses, and practitioners subject to Treasury regulation, while supporters would likely emphasize consumer protection, fraud deterrence, and improved tax administration. Potential concerns include the burden of new education and background-check requirements, the scope of IRS discretion to suspend or revoke PTINs, and public disclosure of disciplinary determinations.