Taxpayer Protection and Preparer Proficiency Act
Summary
The Taxpayer Protection and Preparer Proficiency Act aims to enhance the integrity of the tax preparation process by penalizing improper compliance with taxpayer requirements and improving tax preparer oversight. It introduces penalties for preparers who improperly alter returns or use invalid identification numbers. The act also grants the IRS authority to deny, revoke, or suspend preparer tax identification numbers based on suitability and educational requirements.
Expected Effects
The act will likely increase compliance among tax preparers and reduce instances of fraud and errors in tax returns. Taxpayers may experience greater confidence in the accuracy of their filings. Some tax preparers may face increased scrutiny and potential penalties, leading to higher compliance costs.
Potential Benefits
- Increased accuracy and reliability of tax returns.
- Reduced tax fraud and improper refunds.
- Greater accountability for tax preparers.
- Improved public trust in the tax system.
- Enhanced protection for taxpayers against unscrupulous preparers.
Potential Disadvantages
- Increased compliance costs for tax preparers.
- Potential for delays in tax preparation due to stricter regulations.
- Possible reduction in the number of tax preparers, limiting taxpayer choice.
- Complexity in understanding and adhering to new regulations.
- Risk of errors in implementation of new IRS programs.
Constitutional Alignment
The act aligns with the constitutional principle of promoting the general welfare by ensuring fair and accurate tax collection. Congress has the power to lay and collect taxes, duties, imposts, and excises under Article I, Section 8, Clause 1. The act's provisions for penalizing fraud and ensuring preparer competence support the efficient and equitable exercise of this power.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).