Taxpayer Protection and Preparer Proficiency Act
Sponsored By: Representative Panetta
Introduced
Summary
Preparer identification and oversight. This bill would tighten who counts as a paid tax preparer and require stronger identification, background checks, education, and stiffer penalties to curb misuse of preparer numbers.
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- Paid tax preparers and firms: Would expand the legal definition of a paid preparer and require paid preparer tax identification numbers (PTINs) to meet suitability standards, background checks, a core education curriculum, continuing education, and new grounds for suspension or revocation.
- Penalties and criminal rules: Would raise many preparer penalties to $250 per failure and create a felony for willful misuse of identifying numbers punishable by fines and up to 2 years in prison.
- Taxpayers, supervisors, and the IRS: Would require supervisors to report supervised preparers, require identifying numbers on paid offers-in-compromise with a $250 penalty and a $75,000 annual cap, direct the IRS to publish top preparer errors annually, and mandate a GAO study on IRS‑state information sharing.
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Bill Overview
Analyzed Economic Effects
4 provisions identified: 1 benefits, 2 costs, 1 mixed.
Higher fines and new penalties for preparers
Fines on paid tax preparers would rise. Many per‑violation amounts would go from $50 to $250, with yearly caps raised to $50,000 or $75,000, and one listed amount would rise from $500 to $1,000. A $250 penalty per failure would apply for not using a valid preparer ID or e‑filing ID, with a $75,000 yearly cap and reasonable‑cause relief. Each refund check or electronic refund a preparer misappropriates would trigger a penalty equal to the greater of $1,000 or the full amount. Paid offers‑in‑compromise would need a preparer ID or face $250 per failure (capped at $75,000), and those amounts would adjust for inflation after 2025. Most ID‑number penalty changes would start for returns filed after 18 months; some other changes would begin 180 days after enactment.
New PTIN and training rules for preparers
Paid tax preparers would need an IRS preparer ID (PTIN) issued only to suitable people. You would likely need a background check and up to 18 hours of education each year. The IRS could suspend or revoke a PTIN after notice and a hearing for incompetence or misconduct. The bill would broaden who counts as a preparer and which documents count as a “return,” so more people and filings would be covered. Supervisors of certain exempt staff would have to list those workers and their taxpayer IDs on a return. Most changes would start 180 days after enactment.
Early warning on missing preparer IDs
Within 18 months, the IRS would set up checks to spot missing preparer IDs before accepting e‑filed returns. If a return lacks a valid preparer ID or an e‑filing ID, the submitter could withdraw it or provide the correct number to avoid a penalty. This could help prevent small per‑return fines.
Public posts on preparer errors and discipline
Within 36 months, the IRS would post each year the 10 most common errors by paid preparers and the top 10 reasons they were penalized. The IRS could publish redacted decisions on preparer or representative misconduct and must post final decisions within 30 days, with other taxpayers’ details removed. The disclosure authority would start 180 days after enactment. These posts are meant to inform taxpayers and raise standards.
Sponsors & CoSponsors
Sponsor
Panetta
CA • D
Cosponsors
Steube
FL • R
Sponsored 11/28/2025
Sewell
AL • D
Sponsored 1/27/2026
Roll Call Votes
No roll call votes available for this bill.
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