Reps. Panetta, Yoho Introduce Legislation to Protect Taxpayers, Require Tax Preparer Proficiency Standard
WASHINGTON, DC -- Today, Congressman Jimmy Panetta (D-CA) and Congressman Ted Yoho (R-FL) introduced the Taxpayer Protection and Preparer Proficiency Act. This legislation allows the Internal Revenue Service (IRS) to require minimum standards for paid tax preparers. Senate Finance Committee Ranking Member Ron Wyden (D-OR) and Senator Ben Cardin (D-MD) have introduced a companion bill, S. 1192, in the Senate.
Currently, no minimum federal competency standards for tax preparers exist. Tax preparers have no obligation to receive tax education, training, or competency requirements in tax return preparation, leaving families and individuals who rely on these services at risk.
Due to this deficiency, the IRS receives tens of thousands of complaints per year regarding insufficient services. While tax preparers may be prosecuted for fraud, current precedent bars prosecution for incompetence.
The Taxpayer Protection and Preparer Proficiency Act requires tax preparers demonstrate competency in preparing returns, claims for refund, and associated documents. It also requires preparers to complete continuing education requirements. Additionally, the IRS would be given the authority to rescind taxpayer identification numbers (PTINs) of preparers found to be incompetent or fraudulent.
"All U.S. taxpayers should know their tax preparers are qualified. Our bipartisan bill ensures that preparers meet competency standards and are held accountable, protecting filers from fraud and reducing error rates and audits." said Congressman Panetta.
"Families and individuals all over the country rely on the services of paid tax-preparers during tax season. As American citizens, we are required to pay our taxes and therefore should at least ensure that those who prepare our taxes are competent. However, due to a lack of minimum federal standards, many are taken advantage of by unqualified tax preparers who are looking to make a profit," said Congressman Yoho. "The Taxpayer Protection and Preparer Proficiency Act will restore the ability of Treasury and the IRS to set federal standards of tax practice for all paid return preparers which will provide families and individuals with protection and assurance during tax season."
"The National Association of Enrolled Agents commends Congressman Panetta and Congressman Yoho for introducing minimum standards for paid return preparers. This legislation will make a significant contribution to protecting taxpayers from unscrupulous and incompetent individuals, who every filing season prey on citizens attempting to meet their obligations under the Internal Revenue Code. We look forward to its early enactment," said Rebecca Hawes, Legislative Counsel for the National Association of Enrolled Agents.
"The rules governing tax returns are complex and a robust knowledge of the law is required. It is important for the IRS to ensure that tax return preparers who are offering their services to the public are held to a standard that corresponds with the importance of the role that they play," said Scott Artman, CPA, National Association of Tax Professionals (NATP) Executive Director. "In our profession, we know what happens when a taxpayer has been helped by unqualified tax preparers or has had her information stolen by unscrupulous people. We know because these individuals come to our members for help with their subsequent dealings with the IRS, and that is why we believe in the necessity for the regulation of tax return preparers."
"One of my chief priorities as a member of the Ways and Means Oversight Subcommittee has been to modernize the IRS for the hardworking taxpayers of this country. Every single person who uses a tax preparer should have the peace of mind that the person helping them has the knowledge and requisite skills to handle their financial obligations properly," said Congresswoman Suzan DelBene (D-WA). "This bipartisan legislation is an important step toward protecting taxpayers and holding those accountable who can’t or aren’t willing to take seriously the responsibility of helping taxpayers."
"Incompetent or crooked paid tax preparers regularly exploit taxpayers to pad their bottom line. States like Oregon have led in this area by requiring basic standards for preparers, and it’s critical that we restore federal standards to protect all taxpayers," said Senator Wyden. "It’s a no-brainer to protect your constituents from unscrupulous scammers, and I’d like to thank Congressmen Jimmy Panetta and Ted Yoho for introducing bipartisan companion legislation in the House of Representatives."