H.R. 9499: Protecting Taxpayers from Ghost Preparers Act

This bill would make a few changes to federal tax law, mainly aimed at tax return preparers and victims of tax preparer fraud.

What it would change

• Expands penalties for tax preparers who improperly change returns. The bill updates the Internal Revenue Code so that existing penalties for tax return preparers can apply not only to standard tax returns, but also to certain other tax-related filings, including:
  • administrative adjustment requests,
  • partnership adjustment tracking reports, and
  • other documents that claim to be one of those filings.
• Applies to altered returns and related documents. In practical terms, this means a preparer who improperly changes a client’s filing could face the same penalty rules even if the document is not a regular tax return.
• Changes how the IRS statute of limitations works in some fraud cases. The bill narrows one rule involving the time limit for IRS assessments in cases of fraud, by making clear that the extended limitation period applies when the fraudulent intent is by the taxpayer. This appears intended to prevent victims of preparer fraud from being treated the same way as taxpayers who themselves committed fraud.
• Makes a technical correction. It also makes a minor wording fix to a separate law dealing with disaster-related deadline extensions.

When it would take effect

• The preparer-penalty changes would take effect immediately upon enactment.
• The fraud-limitations change would apply to IRS assessments or proceedings started after enactment.
• The technical correction would be treated as if it had been included in the earlier disaster-deadline law.

Relevant Companies

None found