[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6323 Introduced in House (IH)]
<DOC>
119th CONGRESS
1st Session
H. R. 6323
To amend the Internal Revenue Code of 1986 to penalize improper
compliance with certain taxpayer requirements, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
November 28, 2025
Mr. Panetta (for himself and Mr. Steube) introduced the following bill;
which was referred to the Committee on Ways and Means
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to penalize improper
compliance with certain taxpayer requirements, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,

f4e6004a4510cc8f1ededc73dc3e77051eb6658ddfce106a3a5355cf23b75125

(a) Short Title.--This Act may be cited as the ``Taxpayer
Protection and Preparer Proficiency Act''.
(b) References to Internal Revenue Code.--Except as otherwise
expressly provided, whenever in this Act an amendment is expressed in
terms of an amendment to a section or other provision, the reference
shall be considered to be made to a section or other provision of the
Internal Revenue Code of 1986.
(c) References to Secretary.--For purposes of this Act, the term
``Secretary'' means the Secretary of the Treasury or the Secretary's
delegate.

09f4106aab0001e423ba5e033bf4856a52a5fde2fe1abce4d32dcd96d6e1bac7

RETURNS.
(a) In General.--Paragraph (1) of section 6696(e) is amended to
read as follows:
``(1) Return.--The term `return' means--
``(A) any return of any tax imposed by this title,
``(B) any administrative adjustment request under
section 6227,
``(C) any partnership adjustment tracking report
under section 6226(b)(4)(A), and
``(D) any other document purporting to be a return,
request, or report described in subparagraphs (A)
through (C).''.
(b) Effective Date.--The amendment made by this section shall take
effect on the date of enactment of this Act.

82faca06f14a69a39ec5d76d50f557eff3f319fec58a8bfed5bc11e2e20ad5b7

NUMBERS.
(a) In General.--Section 6695 is amended--
(1) by striking subsection (c) and inserting the following:
``(c) Failure To Furnish Valid Identifying Number.--
``(1) In general.--
``(A) Penalty.--Any person who is a tax return
preparer with respect to any return or claim for refund
and who fails to furnish an identifying number which
complies with section 6109(a)(4)(A) with respect to
such return or claim shall pay a penalty of $250 for
such failure.
``(B) Non-compliance.--For purposes of this
paragraph, an identifying number shall be deemed to not
comply with section 6109(a)(4)(A) if such identifying
number--
``(i) is assigned to another person,
``(ii) does not exist,
``(iii) is inactive or expired,
``(iv) has been withdrawn,
``(v) is suspended or has been revoked, or
``(vi) is otherwise invalid for use by the
tax return preparer.
``(2) Exception.--The penalty imposed under paragraph (1)
shall not apply if it is shown that such failure is due to
reasonable cause and not due to willful neglect.
``(3) Limitation.--The maximum penalty imposed under this
subsection on any person with respect to documents filed during
any calendar year shall not exceed $75,000.'',
(2) by redesignating subsection (h) as subsection (i),
(3) by inserting after subsection (g) the following new
subsection:
``(h) Use of Invalid or Appropriated Electronic Filing
Identification Number.--
``(1) In general.--Any person who is an electronic return
originator with respect to any return or claim for refund who
fails to use, with respect to such return or claim, an
electronic filing identification number which is assigned to
such person by the Secretary, shall pay a penalty of $250 for
such failure, unless it is shown that such failure is due to
reasonable cause and not due to willful neglect.
``(2) Definitions.--For purposes of this subsection--
``(A) Electronic return originator.--
``(i) In general.--The term `electronic
return originator' means a person who
originates the electronic submission of 1 or
more returns or claims for refund on behalf of
other taxpayers.
``(ii) Exceptions.--The term `electronic
return originator' shall not include a person
merely because such person originates an
electronic submission described in clause (i)--
``(I) by furnishing mechanical
assistance to a person described in
such subclause,
``(II) at the direction of an
employer (or of an officer or employee
of the employer) by whom such person is
regularly and continuously employed,
``(III) as a fiduciary, or
``(IV) in response to a
determination that directly or
indirectly affects the tax liability of
a taxpayer.
``(B) Electronic filing identification number.--
``(i) In general.--The term `electronic
filing identification number' means an
identification number assigned by the Secretary
to a person authorized to file returns in
electronic format on behalf of other taxpayers.
``(ii) Suspension or revocation.--In the
case of any electronic filing identification
number which has been suspended or revoked by
the Secretary, such number shall not be deemed
valid for purposes of paragraph (1).'', and
(4) in subsection (i)(1), as redesignated by paragraph (2),
by striking ``and (g)'' and inserting ``(g), and (h)''.
(b) Modification of Definition of Tax Return Preparer.--Section
7701(a)(36) is amended--
(1) by striking subparagraph (A) and inserting the
following:
``(A) In general.--The term `tax return preparer'
means any person who prepares for compensation, or who
employs one or more persons to prepare for
compensation, any return of tax imposed by this title,
any document purporting to be a return of tax imposed
by this title, or any claim for refund of tax imposed
by this title. For purposes of the preceding sentence,
the preparation of a substantial portion of a return,
document purporting to be a return, or claim for refund
shall be treated as if it were the preparation of such
return, document purporting to be a return, or claim
for refund.'', and
(2) in subparagraph (B)--
(A) in clause (ii), by striking ``return or claim
for refund'' and inserting ``return, document
purporting to be a return, or claim for refund'', and
(B) in clause (iii), by striking ``return or claim
for refund'' and inserting ``return, document
purporting to be a return, or claim for refund''.
(c) Prevention of Inadvertent Errors Involving Identifying
Numbers.--
(1) In general.--Not later than 18 months after the date of
enactment of this Act, the Secretary shall establish a program
to improve voluntary compliance with respect to requirements
under subsections (c) and (h) of section 6695 of the Internal
Revenue Code of 1986 (as amended by this section) and avoid the
imposition of penalties under such subsections.
(2) Opportunity to correct.--For purposes of the program
described in paragraph (1), the Secretary shall--
(A) prior to acceptance for processing, identify--
(i) any return or claim for refund which
has been electronically submitted and does not
include an identifying number which complies
with section 6109(a)(4)(A) of the Internal
Revenue Code of 1986, and
(ii) any return or claim for refund which
has been electronically submitted and does not
include an electronic filing identification
number (as defined in section 6695(h)(2)(B) of
such Code), and
(B) provide an opportunity for the person who
submitted such return or claim for refund to avoid
imposition of a penalty under subsection (c) or (h) of
section 6695 of such Code, as applicable, if--
(i) such return or claim for refund is
withdrawn, or
(ii) the correct identifying number or
electronic filing identification number is
provided.
(d) Criminal Penalty.--
(1) In general.--Part I of subchapter A of chapter 75 is
amended by adding at the end the following new section:
``SEC. 7218. WILLFUL MISUSE OR MISAPPROPRIATION OF IDENTIFYING NUMBER.
``(a) In General.--Any tax return preparer who, with respect to any
return, document purporting to be a return, or claim for refund--
``(1) willfully fails to furnish a valid preparer tax
identification number with intent to evade or defeat the
application of any requirement under any provision of this
title which requires such preparer to obtain and furnish such
number,
``(2) willfully furnishes a preparer tax identification
number which--
``(A) does not exist,
``(B) is inactive or expired,
``(C) has been withdrawn,
``(D) is suspended or has been revoked, or
``(E) is otherwise invalid for use by such tax
return preparer, or
``(3) willfully furnishes a preparer tax identification
number which is assigned to another person,
shall, in addition to any other penalties provided by law, be guilty of
a felony and, upon conviction thereof, shall be fined not more than
$50,000 ($100,000 in the case of a corporation), or imprisoned not more
than 2 years, or both, together with the costs of prosecution.
``(b) Preparer Tax Identification Number.--The term `preparer tax
identification number' means an identifying number described in section
6109(a)(4)(A).''.
(2) Clerical amendment.--The table of sections for part I
of subchapter A of chapter 75 is amended by adding at the end
the following new item:
``Sec. 7218. Willful misuse or misappropriation of identifying
number.''.
(e) Effective Date.--The amendments made by this section shall
apply to returns or claims for refund filed after the date which is 18
months after the date of enactment of this Act.

838f61606ab773fd270cc7495bf00164d194c56c37c268721e09199a7e00d3f4

REFUNDS.
(a) Other Assessable Penalties With Respect to the Preparation of
Tax Returns for Other Persons.--Section 6695, as amended by the
preceding provisions of this Act, is amended--
(1) in subsection (a)--
(A) by striking ``$50'' and inserting ``$250'', and
(B) by striking ``$25,000'' and inserting
``$50,000'',
(2) in subsection (b)--
(A) by striking ``$50'' and inserting ``$250'', and
(B) by striking ``$25,000'' and inserting
``$75,000'',
(3) in subsection (d)--
(A) by striking ``$50'' and inserting ``$250'', and
(B) by striking ``$25,000'' and inserting
``$50,000'',
(4) in subsection (e)--
(A) by striking ``$50'' and inserting ``$250'', and
(B) by striking ``$25,000'' and inserting
``$75,000'',
(5) in subsection (g), by striking ``$500'' and inserting
``$1,000'', and
(6) in subsection (i)(1)--
(A) by striking ``2014'' and inserting ``2024'',
and
(B) by striking ``calendar year 2013'' and
inserting ``calendar year 2023''.
(b) Misappropriation of Electronic Funds Transfer.--
(1) In general.--Subsection (f) of section 6695 is amended
to read as follows:
``(f) Negotiation of Check; Misappropriation.--
``(1) In general.--Any person who is a tax return preparer
who--
``(A) endorses or otherwise negotiates (directly or
through an agent) any check made in respect of the
taxes imposed by this title which is issued to a
taxpayer (other than the tax return preparer), or
``(B) misappropriates any refund (or advance
payment with respect to a refundable credit), or any
portion thereof, issued to any taxpayer through an
electronic funds transfer,
shall pay a penalty in an amount determined under paragraph
(2).
``(2) Penalty.--The amount of the penalty determined under
this paragraph shall, with respect to each check or transfer
described in paragraph (1), be equal to the greater of--
``(A) $1,000, or
``(B) the full amount of such check or transfer.
``(3) Exception.--Paragraph (1)(A) shall not apply with
respect to the deposit by a bank (within the meaning of section
581) of the full amount of the check in the taxpayer's account
in such bank for the benefit of the taxpayer.''.
(2) Conforming amendment.--Section 6695(i)(1) is amended by
striking ``(f),'' and inserting ``(f)(2)(A),''.

e049d0188817ab630fc7b1d38f1739ad6dc652a15b94c6fcb5956d2f285eef83

9beb2a642d4274c8daaefed50a52e787a4816414410e77abe0fb39079ac7a5d3

Taxpayer Protection and Preparer Proficiency Act — HR. 6323

Other Sections

Want the full experience?