Tax Preparer Regulation Bill Introduced

Senator Ron Wyden (D -Ore.) has introduced legislation that would give the IRS the authority to set minimum standards for all tax practitioners, as well as add new competency requirements. The bill, “The Taxpayer Protection and Preparer Proficiency Act of 2019,” gives the IRS the explicit legal authority to regulate the practice of tax return preparers, including the ability to sanction them, up to possibly revoking their Preparer Tax Identification Number (PTIN). All return preparers, under this legislation, would be required to have a PTIN. Preparers would also be required to “satisfy any examination and annual continuing education requirements as prescribed by the Secretary” and complete a background check administered by the Treasury Department. Those who are already subject to continuing professional education and had to take a comparable exam to practice (so, basically, CPAs, attorneys and enrolled agents) would be exempt.

The legislation recalls much of the language in a previous IRS regulation on paid return preparers that was struck down in Loving vs. IRS.   The IRS return preparer regulation program required that paid preparers register with the government, pass a competency examination, and from then on log 72 continuing professional education hours every three years. While the service had begun implementing this program in 2011, it was eventually struck down, as the judge found that the IRS lacked the statutory authority to regulate in this way. The new bill would explicitly give the IRS this authority.