Sponsors (4)
The bill strengthens preparer accountability, enforcement, and consumer information—reducing fraud and improving return accuracy—at the cost of higher compliance, enforcement, and administrative burdens and increased legal exposure for preparers, which could raise prices and reduce access to preparer services for some taxpayers.
Most taxpayers and small-business owners will have returns that more clearly identify preparers, improving accountability and making it easier to detect and deter fraud and errors.
Taxpayers benefit from stronger enforcement: expanded civil penalties and criminal deterrents make preparer fraud and misuse of preparer IDs less likely, protecting taxpayer refunds and records.
Taxpayers gain from closing loopholes because more types of filings (e.g., administrative adjustment requests and partnership tracking reports) are explicitly subject to penalties, increasing coverage of enforcement.
Nearly all taxpayers and paid preparers may face higher costs because new penalties, education/background checks, and administrative requirements increase preparer compliance costs that are likely passed to consumers as higher fees.
Small and individual preparers face greater legal exposure—including criminal liability, suspension, revocation, and substantial monetary penalties—which could force some small preparers out of business and reduce taxpayer access to preparer services.
IRS, Treasury, and state tax authorities will face increased administrative burden and implementation costs (guidance updates, comparability determinations, investigations, and reporting), creating short-term disruption and ongoing workload.
Based on analysis of 5 sections of legislative text.
Tightens preparer ID rules and PTIN oversight, raises civil penalties, adds a criminal offense for misuse of preparer IDs, and boosts penalties for refund misappropriation.
Introduced November 28, 2025 by James Varni Panetta · Last progress November 28, 2025
Strengthens rules for tax preparers and electronic filers by expanding what counts as a “return,” raising civil penalties for missing or invalid preparer identification numbers, creating a criminal offense for willful misuse of preparer IDs, and tightening how preparer tax identification numbers (PTINs) are issued and maintained. The bill also raises penalties for a range of preparer failures (failing to give clients copies, sign returns, retain records, file correct information returns) and increases penalties for negotiating or misappropriating taxpayer refunds, including electronic transfers. Most of the new rules and higher civil penalties apply to returns or refund claims filed more than 18 months after enactment. The Treasury Secretary must run a PTIN suitability program (background, education, and compliance checks) and set up an IRS voluntary compliance system to catch and allow fixes for missing or invalid preparer identifiers before penalties are imposed.