Tax Return Preparer Accountability Act of 2025

Subsection (a) of section 330 of title 31, United States Code, is amended—

(1) by striking paragraph (1) and inserting the following:

(1) regulate—

(A) the practice of representatives of persons before the Department of the Treasury; and

(B) the practice of tax return preparers; and

(1) ; and

(2) in paragraph (2)—

(A) by inserting or a tax return preparer to prepare tax returns after practice;

(B) by inserting or tax return preparer before demonstrate; and

(C) by inserting or in preparing their tax returns, claims for refund, or documents in connection with tax returns or claims for refund after cases in subparagraph (D).

Subsection (c) of section 330 of title 31, United States Code, is amended—

(1) by striking before the Department;

(2) by inserting or tax return preparer after representative each place it appears; and

(3) in paragraph (4), by striking misleads or threatens and all that follows and inserting

(3) misleads or threatens—

(A) any person being represented or any prospective person being represented; or

(B) any person or prospective person whose tax return, claim for refund, or document in connection with a tax return or claim for refund, is being or may be prepared.

Section 330 of title 31, United States Code, is amended by adding at the end the following new subsection:

Any tax return preparer shall demonstrate minimum competency standards under this subsection by—

(A) obtaining an identifying number for securing proper identification of such preparer as described in section 6109(a)(4) of the Internal Revenue Code of 1986;

(B) satisfying any examination and annual continuing education requirements as prescribed by the Secretary; and

(C) completing a background check administered by the Secretary.

The Secretary shall exempt tax return preparers who have been subject to comparable examination, continuing education requirements, and background checks administered by the Secretary or any comparable State licensing program. Such exemption shall extend directly to individuals who are supervised by such preparers and are not required to secure an identification number under section 6109(a)(4).

Section 330 of title 31, United States Code, as amended by subsection (c), is amended by adding at the end the following new subsection:

For purposes of this section—

The term tax return preparer has the meaning given such term under section 7701(a)(36) of the Internal Revenue Code of 1986.

The term tax return has the meaning given to the term return under section 6696(e)(1) of the Internal Revenue Code of 1986.

The term claim for refund has the meaning given such term under section 6696(e)(2) of such Code.

Section 6109(a) of the Internal Revenue Code of 1986 is amended by striking paragraph (4) and inserting the following:

Any return or claim for refund prepared by a tax return preparer shall bear such identifying number for securing proper identification of such preparer, his employer, or both, as may be prescribed. For purposes of this paragraph, the terms return and claim for refund have the respective meanings given to such terms by section 6696(e).

Subparagraph (A) shall not apply with respect to the preparation of any return or claim for refund by a tax return preparer if—

(i) such return or claim is prepared by such preparer while such preparer is employed by an attorney, certified public accountant, or enrolled agent firm, and

(ii) such preparer prepares such return or claim under the supervision and direction of a tax return preparer who signs such return or claim and is an attorney, certified public accountant, or enrolled agent.

Section 6109 of such Code is amended by inserting after subsection (d) the following new subsection:

The Secretary may rescind an identifying number issued under subsection (a)(4) if—

(A) after notice and opportunity for a hearing, the preparer is shown to be incompetent or disreputable (as such terms are used in subsection (c) of section 330 of title 31, United States Code); and

(B) rescinding the identifying number would promote compliance with the requirements of this title and effective tax administration.

If an identifying number is rescinded under paragraph (1), the Secretary shall place in the file in the Office of the Director of Professional Responsibility the opinion of the Secretary with respect to the determination, including—

(A) a statement of the facts and circumstances relating to the determination; and

(B) the reasons for the rescission.

The amendments made by this subsection shall apply to returns filed after the date of the enactment of this Act.

As soon as practicable, the Secretary of the Treasury (or the Secretary’s delegate), shall implement at the Internal Revenue Service an algorithm that will enable the Internal Revenue Service to—

(1) identify taxpayers at high risk of economic hardship (as defined by the Secretary in regulations),

(2) ask questions of taxpayers who contact the Internal Revenue Service regarding a balance due for purposes of identifying those at risk of hardship,

(3) in the case of taxpayers at risk of economic hardship who seek to enter into streamlined installment agreements online, to notify such taxpayers of the resources available to them,

(4) determine whether to exclude taxpayers’ debts from automated collection treatments such as the Federal Payment Levy Program, the private debt collection program, and passport certification, and

(5) rank cases for collection priority.

The Secretary of the Treasury (or the Secretary’s delegate), shall—

(1) as soon as practicable, promulgate such regulations and guidance as are necessary to prescribe information security standards for all tax software providers, and

(2) annually thereafter, review and update such standards.