Tax Refund Protection Act of 2014

Summary: Tax Refund Protection Act of 2014 - Amends the Consumer Financial Protection Act of 2010 to require the Consumer Financial Protection Bureau (CFPB) to: (1) regulate refund anticipation payment arrangements, (2) establish a licensing or certification program governing tax return preparers subject to this Act, (3) regulate such preparers, and (4) require applicants to demonstrate qualifications and competency to perform tax return preparation sevices. Authorizes the CFPB to impose a licensing or certification fee. Directs the CFPB to require such preparers to make prescribed disclosures to a consumer, including: (1) a fee schedule for preparing or filing a federal income tax return, or executing a refund anticipation payment arrangement; and (2) the consumer's responsibility to pay any fees and interest associated with a refund anticipation payment arrangement even if the consumer does not receive a tax refund or the refund's amount is less than anticipated under the arrangement. Empowers the CFPB to take enforcement action against a preparer for specified violations. Amends the Internal Revenue Code to permit a federal income tax refund, on taxpayer request, to be split between the taxpayer and the preparer. Prohibits treatment of such a split as disreputable conduct merely because the taxpayer requested the split.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Tax Refund Protection Act of 2014''.

SEC. 2. REGULATION OF REFUND ANTICIPATION PAYMENT INSTRUMENTS AND TAX 
              RETURN PREPARERS.

    (a) In General.--Subtitle B of the Consumer Financial Protection 
Act of 2010 (12 U.S.C. 5481 et seq.) is amended by adding at the end 
the following new section:

``SEC. 1029B. REGULATION OF REFUND ANTICIPATION PAYMENT ARRANGEMENTS 
              AND TAX RETURN PREPARERS.

    ``(a) In General.--The Bureau shall--
            ``(1) regulate refund anticipation payment arrangements;
            ``(2) establish a program to license or certify tax return 
        preparers subject to this section;
            ``(3) regulate such tax return preparers; and
            ``(4) before licensing or certifying a person as a tax 
        return preparer subject to this section, require that the 
        person demonstrate--
                    ``(A) good character;
                    ``(B) good reputation;
                    ``(C) necessary qualifications to enable the person 
                to provide to persons valuable service as a tax return 
                preparer; and
                    ``(D) competency to perform the functions of a tax 
                return preparer.
    ``(b) Authority To Impose a Fee.--The Bureau shall require tax 
return preparers subject to this section to pay a reasonable fee for 
licensing or certification under this section.
    ``(c) Disclosure Requirements.--The Bureau shall, by rule, require 
tax return preparers subject to this section to provide a disclosure 
statement to a consumer that shall contain statements--
            ``(1) identifying the amount of fees such tax return 
        preparer charges for preparing a Federal income tax return, 
        filing a Federal income tax return, or executing a refund 
        anticipation payment arrangement;
            ``(2) identifying the average amount of time in which an 
        individual who files a Federal income tax return electronically 
        can expect to receive a refund by mail, according to 
        information provided by the Internal Revenue Service;
            ``(3) describing, in the case of a refund anticipation 
        payment arrangement involving a depository account not 
        controlled by the consumer, the difference in days between the 
        average amount of time by which a consumer receives the tax 
        refund (in whole or in part) from a refund anticipation payment 
        arrangement and the average amount of time by which a consumer 
        who files a Federal income tax return electronically receives 
        the tax refund deposited directly to that consumer's deposit 
        account by the taxing authority;
            ``(4) that a refund anticipation payment arrangement is not 
        necessary to receive a tax refund; and
            ``(5) that, if a consumer does not receive a tax refund or 
        the amount of the tax refund is less than the amount 
        anticipated under the refund anticipation payment arrangement, 
        the consumer may be responsible for paying any fees and 
        interest associated with a refund anticipation payment 
        arrangement.
    ``(d) Requirements Under TILA.--The Bureau shall issue regulations 
that, to the extent practicable, require tax return preparers that 
enter into a refund anticipation payment arrangement to comply with 
section 128 of the Truth in Lending Act (15 U.S.C. 1638) to the same 
extent as a creditor making a consumer credit transaction other than 
under an open end credit plan.
    ``(e) Disciplinary Procedures.--After notice and opportunity for a 
hearing, the Bureau may take any enforcement action against a tax 
return preparer subject to this section who--
            ``(1) is incompetent;
            ``(2) is disreputable;
            ``(3) violates regulations prescribed under this section; 
        or
            ``(4) with intent to defraud, willfully and knowingly 
        misleads or threatens a consumer.
    ``(f) Definitions.--For purposes of this section, the following 
definitions shall apply:
            ``(1) Tax return preparer.--The term `tax return preparer 
        subject to this section' means a tax return preparer (as 
        defined in section 7701(a)(36) of the Internal Revenue Code of 
        1986) who is not subject to regulation under section 330 of 
        title 31, United States Code.
            ``(2) Refund anticipation payment arrangement.--The term 
        `refund anticipation payment arrangement' means an arrangement 
        under which, in exchange for Federal income tax preparation 
        services, a consumer agrees to pay a fee or interest upon 
        receipt of the consumer's tax refund to a tax return preparer, 
        lender, or other affiliated lender by--
                    ``(A) requesting the Federal Government to deposit 
                such tax refund, in whole or in part, directly into a 
                depository account designated by either the consumer or 
                the tax return preparer, lender, or other affiliated 
                lender; or
                    ``(B) directly paying the fee or interest to the 
                tax return preparer, lender, or other affiliated 
                lender.''.
    (b) Clerical Amendment.--The table of contents of the Dodd-Frank 
Wall Street Reform and Consumer Protection Act (12 U.S.C. 5301 et seq.) 
is amended by inserting after the item related to section 1029A the 
following new item:

``Sec. 1029B. Regulation of refund anticipation payment arrangements 
                            and tax return preparers.''.
    (c) Exclusion for Certain Tax Preparers.--
            (1) In general.--Section 1027(d)(1) of such Act is amended 
        by striking subparagraph (B).
            (2) Conforming amendments.--Section 1027(d) of such Act is 
        further amended--
                    (A) in paragraph (1)--
                            (i) in the heading, by striking ``and Tax 
                        Preparers'';
                            (ii) by striking subparagraph (B);
                            (iii) by striking ``authority over'' and 
                        all that follows through ``any person'' and 
                        inserting ``authority over any person'';
                            (iv) by redesignating clauses (i) and (ii) 
                        as subparagraphs (A) and (B), respectively, and 
                        by moving such subparagraphs 2 ems to the left;
                            (v) by redesignating subclauses (I) and 
                        (II) as clauses (i) and (ii), respectively, and 
                        by moving such clauses 2 ems to the left;
                            (vi) in subparagraph (A) (as redesignated), 
                        by inserting ``(except as related to tax return 
                        preparers pursuant to section 1029B)'' after 
                        ``tax''; and
                            (vii) in clause (ii) (as redesignated), by 
                        striking ``; or'' and inserting a period; and
                    (B) in paragraph (2)--
                            (i) in subparagraph (A)--
                                    (I) by striking ``paragraph (1)(A) 
                                or (1)(B)'' and inserting ``such 
                                paragraph''; and
                                    (II) by striking ``paragraph 
                                (1)(A)'' each place it appears and 
                                inserting ``paragraph (1)'';
                            (ii) in subparagraph (C)--
                                    (I) by striking ``For purposes of 
                                subparagraphs (A) and (B), a person 
                                described in paragraph (1)(A)'' and 
                                inserting ``A person described in 
                                paragraph (1)''; and
                                    (II) by striking ``clause (i) or 
                                (ii) of paragraph (1)(A)'' and 
                                inserting ``subparagraph (A) or (B) of 
                                paragraph (1)''; and
                            (iii) in subparagraph (D), by striking 
                        ``described in paragraph (1)(A) or (1)(B)''.

SEC. 3. SPLIT REFUNDS MAY INCLUDE TAX RETURN PREPARER.

    (a) In General.--Section 6402 of the Internal Revenue Code of 1986 
is amended by adding at the end the following:
    ``(m) Split Refunds.--An income tax refund requested on a return of 
Federal income tax prepared by an income tax preparer may be split 
between the preparer and the taxpayer in accordance with the split 
requested by the taxpayer on the return. A split of an individual 
income tax return under this subsection shall not be treated as 
disreputable conduct merely because the taxpayer requested such 
split.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply with respect to returns for taxable years ending after the date 
of the enactment of this Act.