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119-hr-1983119th CongressWALLET

Tax Return Preparer Accountability Act of 2025

Sponsored By: Representative Cohen, Steve [D-TN-9]

Introduced

Summary

Regulate tax return preparers nationwide by bringing them into the same oversight framework as other Department of the Treasury representatives and setting minimum competency, identity, and conduct standards.

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  • Preparers would face prescribed competency standards, examinations, continuing education, and background checks, and the Secretary could rescind preparer identifying numbers for incompetence or disrepute.
  • Taxpayers' returns and refund claims prepared by a tax return preparer would need to bear a preparer identifying number, with exceptions when returns are prepared under supervision by an attorney, certified public accountant, or enrolled agent firm.
  • Creates formal hearings, written determinations, and recordkeeping in the Office of the Director of Professional Responsibility, aligns definitions of "tax return preparer," "tax return," and "claim for refund" with the Internal Revenue Code, and allows exemptions for individuals subject to comparable state licensing or supervision.

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Bill Overview

Analyzed Economic Effects

3 provisions identified: 2 benefits, 0 costs, 1 mixed.

Stronger data security for tax software

If enacted, the Treasury would set security rules for all tax software providers. Providers would have to follow these rules to protect taxpayer data. The government would review and update the standards every year. This could cut data breaches and identity theft for many filers.

IRS help for hardship tax debts

If enacted, the IRS would use an algorithm to spot taxpayers at high risk of economic hardship (as defined by the Secretary). When you call about a balance due, the IRS would ask questions to check for hardship. If you try to set up a quick online payment plan, it would alert you to help you may qualify for. For at‑risk taxpayers, the IRS could pull some debts out of automatic collection, private collectors, and passport certification, and rank those cases lower. The IRS would implement this as soon as practicable.

Stronger rules for paid tax preparers

If enacted, paid tax preparers would need an IRS ID number, pass exams and yearly training, and complete a background check. Returns they prepare would usually have to show that ID number. Preparers working under a signing attorney, CPA, or enrolled agent could be excepted. The IRS would exempt preparers with comparable State licenses and their supervised staff who are not required to get a separate ID. Preparers could face sanctions, including ID cancellation after notice and a hearing, for incompetence, disrepute, or misleading or threatening clients. These rules would apply to returns filed after enactment.

Sponsors & CoSponsors

Sponsor

Cohen, Steve [D-TN-9]

TN • D

Cosponsors

  • Del. Norton, Eleanor Holmes [D-DC-At Large]

    DC • D

    Sponsored 12/16/2025

Roll Call Votes

No roll call votes available for this bill.

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