“To amend title 31, United States Code, to direct the Secretary of the Treasury to regulate tax return preparers, and for other purposes.”
No CRS summary available for this bill.
This section expands the Secretary of the Treasury's regulatory authority under 31 U.S.C. 330 to include the practice of tax return preparers (i.e., persons who prepare for compensation, or who employ others to prepare for compensation, all or substantially all of a tax return or claim for refund, as defined in 26 U.S.C. 7701(a)(36)) in addition to representatives before the Department of the Treasury. The section (1) subjects tax return preparers to the same admission standards (good character, reputation, qualifications, and competency), sanctions (suspension, disbarment, censure, and monetary penalties not exceeding gross income from the conduct), and regulations as representatives; (2) requires tax return preparers to meet minimum competency standards, including obtaining a preparer tax identification number (PTIN under 26 U.S.C. 6109(a)(4)), passing an examination, completing annual continuing education, and undergoing a background check (with exemptions for those meeting comparable federal or state standards or supervised by exempt preparers); (3) requires all tax returns and claims for refund to bear the preparer's PTIN (except those prepared under supervision of an attorney, CPA, or enrolled agent who signs the return); and (4) authorizes the Secretary to rescind a PTIN after notice and hearing if the preparer is incompetent or disreputable and rescission promotes tax compliance. The PTIN amendments under 26 U.S.C. 6109 apply to returns filed after the date of enactment. (Thus, the changes impose federal oversight, registration, and disciplinary mechanisms on the tax preparation industry, which previously lacked comprehensive regulation beyond voluntary PTIN use.)
This section directs the Secretary of the Treasury, as soon as practicable, to implement an IRS algorithm that (1) identifies taxpayers at high risk of economic hardship (as defined in regulations), (2) asks questions of taxpayers contacting the IRS about balances due to identify those at risk, (3) notifies at-risk taxpayers seeking online streamlined installment agreements of available resources, (4) determines whether to exclude such taxpayers' debts from automated collections including the Federal Payment Levy Program (i.e., levies on federal payments such as Social Security), private debt collection, and passport certification (i.e., IRS certification of tax delinquents to the State Department), and (5) ranks cases for collection priority. (Thus, at-risk taxpayers may avoid harsh automated enforcement.) Separately, the section requires the Secretary to promulgate information security standards for all tax software providers as soon as practicable and to review and update those standards annually thereafter.