If you pay someone to file your taxes, you expect them to follow the law and protect your data. A new bipartisan bill introduced in Washington aims to ensure that happens by threatening jail time and massive fines for preparers who cheat the system or lack the necessary skills to do the job.
U.S. Representatives Greg Steube (R-Fla.) and Jimmy Panetta (D-Calif.) unveiled the Taxpayer Protection and Preparer Proficiency Act Friday, a piece of legislation designed to weed out incompetent and malicious actors in the tax preparation industry.
Under the proposed law, the stakes for messing with a client’s return would get significantly higher. The bill expands the definition of tax returns to catch more fraudulent activity and establishes strict penalties for preparers who fail to provide valid ID numbers or improperly alter returns.
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Most notably, the legislation makes it a felony to willfully misuse or misappropriate identification numbers. Individuals caught breaking these rules could face up to two years behind bars and fines reaching $50,000, while corporations could see penalties double that amount to $100,000.
“Americans trust that tax preparers will be honest and thorough with their work,” Steube said in a statement regarding the bill. He noted that when that trust is broken, the fallout for families and small businesses can be “catastrophic,” emphasizing that it is time to raise the standards for the professionals handling the financial livelihoods of the American people.
Representative Panetta echoed that sentiment, arguing that innocent taxpayers are currently bearing the brunt of mistakes made by the professionals they hire.
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“My bipartisan legislation will help taxpayers avoid paying the price for untrustworthy or incompetent tax preparers by ensuring they’re held accountable,” Panetta said. “If you pay someone else to help you prepare your taxes, you should feel confident and secure that your tax preparer is professional, proficient, and principled.”
Beyond criminal penalties, the bill seeks to professionalize the industry by granting the Secretary of the Treasury the authority to deny, revoke, or suspend the Preparer Tax Identification Numbers (PTINs) of bad actors. It also outlines frameworks for background checks and continuing education, ensuring that anyone paid to navigate the complex IRS code is actually qualified to do so.
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