The Taxpayer Protection and Preparer Proficiency Act strengthens oversight and accountability for tax return preparers by establishing new identification and credential requirements, enforcement penalties, and disclosure rules. Preparers must pass background checks, meet suitability standards, complete at least 18 hours of annual continuing education in ethics and tax law, and include their identification numbers on documents prepared for clients. The bill creates civil penalties of $250 per violation (capped at $50,000–$75,000 annually) for improper handling of identification numbers or client refunds, a felony offense with up to 2 years imprisonment for willful misuse of preparer credentials, and allows the IRS to suspend or revoke preparer credentials for incompetence, fraud, or violations. The IRS must publicly disclose disciplinary actions within 30 days, publish annual reports on common preparer errors and discipline reasons, and supervisors must report exempt preparers under their supervision. The bill also directs the Government Accountability Office to study information-sharing between federal and state tax authorities on preparer standards.
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