[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2702 Introduced in House (IH)]
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118th CONGRESS
1st Session
H. R. 2702
To regulate tax return preparers and refund anticipation payment
arrangements.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
April 19, 2023
Ms. Bonamici (for herself, Mr. Carson, Ms. Norton, and Mrs. Hayes)
introduced the following bill; which was referred to the Committee on
Ways and Means
_______________________________________________________________________
A BILL
To regulate tax return preparers and refund anticipation payment
arrangements.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Tax Refund Protection Act''.
SEC. 2. REGULATION OF TAX RETURN PREPARERS.
(a) In General.--Section 330 of title 31, United States Code, is
amended to read as follows:
``Sec. 330. Practice before the department and tax return preparers
``(a) Subject to section 500 of title 5, the Secretary of the
Treasury may--
``(1) regulate the practice of representatives of persons
before the Department of the Treasury through licensure;
``(2) certify the practice of tax return preparers; and
``(3) before admitting a representative or a tax return
preparer to practice, require that the representative or tax
return preparer demonstrate--
``(A) good character;
``(B) good reputation;
``(C) necessary qualifications to enable the
representative or tax return preparer to provide to
persons valuable service; and
``(D) competency to advise and assist persons in
presenting their cases or in preparing tax returns,
claims for refund, or other submissions related to the
Internal Revenue Code of 1986 or other laws or
regulations administered by the Internal Revenue
Service.
``(b) Any enrolled agents properly licensed to practice as required
under rules promulgated under subsection (a) shall be allowed to use
the credentials or designation of `enrolled agent', `EA', or `E.A.'.
``(c)(1) After notice and opportunity for a proceeding, the
Secretary may, with respect to a representative or tax return preparer
who is described in paragraph (2)--
``(A) suspend or disbar from practice before the Department
a representative;
``(B) decertify a tax return preparer; or
``(C) censure a representative or tax return preparer.
``(2) A representative or tax return preparer is described in this
paragraph if the representative or tax return preparer--
``(A) is incompetent;
``(B) is disreputable;
``(C) violates regulations prescribed under this section;
or
``(D) with intent to defraud, willfully and knowingly
misleads or threatens the person being represented or a
prospective person to be represented.
``(3) The Secretary may impose a monetary penalty on any
representative or tax return preparer described in paragraph (2). If
the representative or tax return preparer was acting on behalf of an
employer or any firm or other entity in connection with the conduct
giving rise to such penalty, the Secretary may impose a monetary
penalty on such employer, firm, or entity if it knew, or reasonably
should have known, of such conduct. Such penalty shall not exceed the
gross income derived (or to be derived) from the conduct giving rise to
the penalty and may be in addition to, or in lieu of, any suspension of
the representative, the decertification of the tax return preparer, or
censure of the representative or the tax return preparer.
``(d) After notice and opportunity for a hearing to any appraiser,
the Secretary may--
``(1) provide that appraisals by such appraiser shall not
have any probative effect in any administrative proceeding
before the Department of the Treasury or the Internal Revenue
Service, and
``(2) bar such appraiser from presenting evidence or
testimony in any such proceeding.
``(e) Nothing in this section or in any other provision of law
shall be construed to limit the authority of the Secretary of the
Treasury to impose standards applicable to the rendering of written
advice with respect to any entity, transaction plan or arrangement, or
other plan or arrangement, which is of a type which the Secretary
determines as having a potential for tax avoidance or evasion.
``(f)(1) The Secretary of the Treasury may impose fees on tax
return preparers necessary to implement such programs as required by
subsection (a).
``(2) In addition to paragraph (1), the Commissioner of Internal
Revenue may impose an annual fee necessary for any competency testing
and training required for licensure and certification under this
section.
``(3) Nothing in this section may be construed to limit the
authority of the Commissioner of Internal Revenue to issue orders and
establish fees related to the other purposes, including the issuing of
Preparer Tax Identification Numbers.
``(g) For purposes of this section--
``(1) the term `tax return preparer' has the meaning given
such term by section 7701(a)(36) of the Internal Revenue Code
of 1986;
``(2) the term `tax return' has the meaning given to the
term `return' under section 6696(e)(1) of such Code; and
``(3) the term `claim for refund' has the meaning given
such term under section 6696(e)(2) of such Code.''.
(b) Clerical Amendment.--The chapter analysis for chapter 3 of
title 31, United States Code, is amended by striking the item relating
to section 330 and inserting the following:
``330. Practice before the department and tax return preparers.''.
SEC. 3. CLARIFYING AUTHORITY TO IMPOSE CIVIL PENALTIES FOR IMPROPER
DISCLOSURES.
Subsection (c) of section 6713 of the Internal Revenue Code of 1986
is amended to read as follows:
``(c) Exceptions.--
``(1) Exceptions.--The rules of section 7216(b) shall apply
for purposes of this section.
``(2) Cross reference.--See section 7216 for criminal
penalty for disclosure or use of information by preparers of
returns.''.
SEC. 4. REGULATION OF REFUND ANTICIPATION PAYMENT INSTRUMENTS.
(a) Disclosure Requirements for Tax Return Preparers.--Subchapter A
of chapter 80 of the Internal Revenue Code of 1986 is amended by adding
at the end the following new section:
``SEC. 7813. DISCLOSURE REQUIREMENTS FOR TAX RETURN PREPARERS.
``(a) In General.--The Secretary may require tax return preparers
to provide disclosures to a person receiving tax return preparation
services or a prospective person to receive such services. Such
disclosures shall--
``(1) identify the amount of fees the tax return preparer
charges for preparing a tax return, filing a tax return,
submitting a claim for refund, executing a refund anticipation
payment arrangement, or submitting other submissions related to
this title or other laws or regulations administered by the
Internal Revenue Service,
``(2) identify where on the website published by the
Internal Revenue Service the average amount of time in which an
individual who files a Federal income tax return can expect to
receive a refund,
``(3) in the case of a refund anticipation payment
arrangement involving a depository account not controlled by
the person receiving tax return preparation services or a
prospective person to receive such services, describe--
``(A) the difference in days between the average
amount of time by which a person receiving tax return
preparation services or a prospective person to receive
such services receives the tax refund (in whole or in
part) from a refund anticipation payment arrangement,
and
``(B) the average amount of time by which a person
receiving tax return preparation services or a
prospective person to receive such services who files a
Federal income tax return electronically receives the
tax refund deposited directly to that person's account
by the taxing authority,
``(4) state that a refund anticipation payment arrangement
is not necessary to receive a tax refund,
``(5) state that, if a person receiving tax return
preparation services or a prospective person to receive such
services does not receive a tax refund or the amount of the tax
refund is less than the amount anticipated under the refund
anticipation payment arrangement, the person receiving tax
return preparation services or a prospective person to receive
such services may be responsible for paying any fees and
interest associated with a refund anticipation payment
arrangement, and
``(6) include any such other disclosures not specified in
the preceding paragraphs to carry out this section that the
Secretary deems appropriate.
``(b) Refund Anticipation Payment Arrangement Defined.--For
purposes of this section, the term `refund anticipation payment
arrangement' means an arrangement under which, in exchange for Federal
income tax preparation services, a consumer agrees to pay a fee or
interest upon receipt of the consumer's tax refund to a tax return
preparer, lender, or other affiliated lender by--
``(1) requesting the Federal Government to deposit such tax
refund, in whole or in part, directly into a depository account
designated by either the consumer or the tax return preparer,
lender, or other affiliated lender, or
``(2) directly paying the fee or interest to the tax return
preparer, lender, or other affiliated lender.''.
(b) Failure To Disclose.--Part I of subchapter B of chapter 68 of
such Code is amended by adding at the end the following:
``SEC. 6720D. FAILURE TO MEET DISCLOSURE REQUIREMENTS FOR TAX RETURN
PREPARERS.
``(a) General Rule.--If a tax return preparer fails to meet the
requirements of section 7813, the Secretary may impose a penalty of up
to $1,000 per each such failure.
``(b) Penalty in Addition to Other Penalties.--The penalty imposed
by this section shall be in addition to any other penalty imposed by
law.''.
(c) Clerical Amendments.--
(1) The table of sections for subchapter B of chapter 68 of
such Code is amended by inserting after the item related to
section 6720C the following new item:
``Sec. 6720D. Failure to meet disclosure requirements for tax return
preparers.''.
(2) The table of sections for subchapter A of chapter 80 of
such Code is amended by inserting after the item related to
section 7812 the following new item:
``Sec. 7813. Disclosure requirements for tax return preparers.''.
(d) Effective Date.--The amendments made by this section shall
apply with respect to returns filed after December 31, 2023.
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