CONGRESSMAN PANETTA REINTRODUCES BIPARTISAN TAXPAYER PROTECTION AND PAID PREPARER PROFICIENCY ACT
Today, Congressman Jimmy Panetta (D-CA-20) and Congressman Tom Rice (R-SC-07) introduced the Taxpayer Protection and Preparer Proficiency Act. This legislation allows the Internal Revenue Service (IRS) to regulate paid tax preparers and mandates that they meet minimum competency standards.
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 that 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 to demonstrate competency in preparing returns, claims for refund, and associated documents. The legislation 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.
“Mistakes by incompetent tax preparers have led to many taxpayers getting audited or penalized through no fault of their own,” said Congressman Panetta. “My bipartisan legislation will help prevent such predicaments by allowing the IRS to regulate paid tax preparers and ensure that they are meeting minimum competency standards. Anybody who pays for their taxes to be prepared deserves to know that their tax preparers are professional, proficient, and principled and, if not, will be held accountable by the IRS.”
“Folks across America rely on tax preparers and they expect that the preparers are qualified and competent,” said Congressman Rice. “The Taxpayer Protection and Preparer Proficiency Act will reduce error rates, lower risks for taxpayers, and helps put a stop to the use of unqualified tax preparers. Since the federal government dictates our obligation to file taxes, we ought to allow the IRS to ensure that those who taxpayers turn to for assistance are well qualified.”
“We are grateful for the bipartisan leadership shown by Representatives Panetta and Rice to address incompetent and unscrupulous tax return preparers and maintain taxpayer confidence in our tax system. For many years, the AICPA has steadfastly supported enhancing compliance and elevating ethical conduct throughout the tax preparation industry. Taxpayers need and deserve these protections, and we must ensure that the IRS has the tools it needs to conduct appropriate oversight,” said AICPA President and CEO, Barry Melancon, CPA, CGMA.
“This legislation will contribute greatly to the overall professionalism of the tax preparation industry and will go a long way toward protecting taxpayers from unqualified and unscrupulous preparers. We look forward to its enactment,” said David W. Tolleth, President, National Association of Enrolled Agents
“The rules governing tax returns are complex, and a robust knowledge of the law is required. Additionally, the information required to file a return accurately is highly sensitive. 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 and the information they have access to," said Scott Artman, CPA, National Association of Tax Professionals (NATP) Executive Director. "Reducing the tax gap will take a combination of efforts, one of which is requiring those who are paid for tax preparation to meet required standards. For these reasons, we believe in the necessity for the regulation of tax return preparers.”
“With Policymakers in Washington relying more and more on the tax code to assist small businesses – everything from PPP loans to the Employee Retention Tax Credit – it is imperative that preparers be competent and honest. This legislation will go a long way to ensuring that,” said Roger Harris, President and Chief Operating Officer, Padgett Business Services.