II 

117TH CONGRESS 

1ST SESSION S. 2856 

To regulate tax return preparers and refund anticipation payment 

arrangements. 

IN THE SENATE OF THE UNITED STATES 

SEPTEMBER 27, 2021 

Mr. BOOKER introduced the following bill; which was read twice and referred 

to the Committee on Finance 

A BILL 

To regulate tax return preparers and refund anticipation 

payment arrangements. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. REGULATION OF TAX RETURN PREPARERS. 

4 (a) IN GENERAL.—Section 330 of title 31, United 

5 States Code, is amended to read as follows: 

6 ‘‘§ 330. Practice before the department and tax return 

7 preparers 

8 ‘‘(a) Subject to section 500 of title 5, the Secretary 

9 of the Treasury may— 


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1 ‘‘(1) regulate the practice of representatives of 

2 persons before the Department of the Treasury 

3 through licensure; 

4 ‘‘(2) certify the practice of tax return pre5 parers; and 

6 ‘‘(3) before admitting a representative or a tax 

7 return preparer to practice, require that the rep8 resentative or tax return preparer demonstrate— 

9 ‘‘(A) good character; 

10 ‘‘(B) good reputation; 

11 ‘‘(C) necessary qualifications to enable the 

12 representative or tax return preparer to provide 

13 to persons valuable service; and 

14 ‘‘(D) competency to advise and assist per15 sons in presenting their cases or in preparing 

16 tax returns, claims for refund, or other submis17 sions related to the Internal Revenue Code of 

18 1986 or other laws or regulations administered 

19 by the Internal Revenue Service. 

20 ‘‘(b) Any enrolled agents properly licensed to practice 

21 as required under rules promulgated under subsection (a) 

22 shall be allowed to use the credentials or designation of 

23 ‘enrolled agent’, ‘EA’, or ‘E.A.’. 


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1 ‘‘(c)(1) After notice and opportunity for a proceeding, 

2 the Secretary may, with respect to a representative or tax 

3 return preparer who is described in paragraph (2)— 

4 ‘‘(A) suspend or disbar from practice before the 

5 Department a representative; 

6 ‘‘(B) decertify a tax return preparer; or 

7 ‘‘(C) censure a representative or tax return pre8 parer. 

9 ‘‘(2) A representative or tax return preparer is de10 scribed in this paragraph if the representative or tax re11 turn preparer— 

12 ‘‘(A) is incompetent; 

13 ‘‘(B) is disreputable; 

14 ‘‘(C) violates regulations prescribed under this 

15 section; or 

16 ‘‘(D) with intent to defraud, willfully and know17 ingly misleads or threatens the person being rep18 resented or a prospective person to be represented. 

19 ‘‘(3) The Secretary may impose a monetary penalty 

20 on any representative or tax return preparer described in 

21 paragraph (2). If the representative or tax return preparer 

22 was acting on behalf of an employer or any firm or other 

23 entity in connection with the conduct giving rise to such 

24 penalty, the Secretary may impose a monetary penalty on 

25 such employer, firm, or entity if it knew, or reasonably 


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1 should have known, of such conduct. Such penalty shall 

2 not exceed the gross income derived (or to be derived) 

3 from the conduct giving rise to the penalty and may be 

4 in addition to, or in lieu of, any suspension of the rep5 resentative, the decertification of the tax return preparer, 

6 or censure of the representative or the tax return preparer. 

7 ‘‘(d) After notice and opportunity for a hearing to 

8 any appraiser, the Secretary may— 

9 ‘‘(1) provide that appraisals by such appraiser 

10 shall not have any probative effect in any adminis11 trative proceeding before the Department of the 

12 Treasury or the Internal Revenue Service, and 

13 ‘‘(2) bar such appraiser from presenting evi14 dence or testimony in any such proceeding. 

15 ‘‘(e) Nothing in this section or in any other provision 

16 of law shall be construed to limit the authority of the Sec17 retary of the Treasury to impose standards applicable to 

18 the rendering of written advice with respect to any entity, 

19 transaction plan or arrangement, or other plan or arrange20 ment, which is of a type which the Secretary determines 

21 as having a potential for tax avoidance or evasion. 

22 ‘‘(f)(1) The Secretary of the Treasury may impose 

23 fees on tax return preparers necessary to implement such 

24 programs as required by subsection (a). 


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1 ‘‘(2) In addition to paragraph (1), the Commissioner 

2 of Internal Revenue may impose an annual fee necessary 

3 for any competency testing and training required for licen4 sure and certification under this section. 

5 ‘‘(3) Nothing in this section may be construed to limit 

6 the authority of the Commissioner of Internal Revenue to 

7 issue orders and establish fees related to the other pur8 poses, including the issuing of Preparer Tax Identification 

9 Numbers. 

10 ‘‘(g) For purposes of this section— 

11 ‘‘(1) the term ‘tax return preparer’ has the 

12 meaning given such term by section 7701(a)(36) of 

13 the Internal Revenue Code of 1986; 

14 ‘‘(2) the term ‘tax return’ has the meaning 

15 given to the term ‘return’ under section 6696(e)(1) 

16 of such Code; and 

17 ‘‘(3) the term ‘claim for refund’ has the mean18 ing given such term under section 6696(e)(2) of 

19 such Code.’’. 

20 (b) CLERICAL AMENDMENT.—The chapter analysis 

21 for chapter 3 of title 31, United States Code, is amended 

22 by striking the item relating to section 330 and inserting 

23 the following: 

‘‘330. Practice before the department and tax return preparers.’’. 


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1 SEC. 2. CLARIFYING AUTHORITY TO IMPOSE CIVIL PEN2 ALTIES FOR IMPROPER DISCLOSURES. 

3 Subsection (c) of section 6713 of the Internal Rev4 enue Code of 1986 is amended to read as follows: 

5 ‘‘(c) EXCEPTIONS.— 

6 ‘‘(1) EXCEPTIONS.—The rules of section 

7 7216(b) shall apply for purposes of this section. 

8 ‘‘(2) CROSS REFERENCE.—See section 7216 for 

9 criminal penalty for disclosure or use of information 

10 by preparers of returns.’’. 

11 SEC. 3. REGULATION OF REFUND ANTICIPATION PAYMENT 

12 INSTRUMENTS. 

13 (a) DISCLOSURE REQUIREMENTS FOR TAX RETURN

14 PREPARERS.—Subchapter A of chapter 80 of the Internal 

15 Revenue Code of 1986 is amended by adding at the end 

16 the following new section: 

17 ‘‘SEC. 7813. DISCLOSURE REQUIREMENTS FOR TAX RETURN 

18 PREPARERS. 

19 ‘‘(a) IN GENERAL.—The Secretary may require tax 

20 return preparers to provide disclosures to a person receiv21 ing tax return preparation services or a prospective person 

22 to receive such services. Such disclosures shall— 

23 ‘‘(1) identify the amount of fees the tax return 

24 preparer charges for preparing a tax return, filing a 

25 tax return, submitting a claim for refund, executing 

26 a refund anticipation payment arrangement, or subVerDate Sep 11 2014 00:25 Sep 28, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S2856.IS S2856

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1 mitting other submissions related to this title or 

2 other laws or regulations administered by the Inter3 nal Revenue Service, 

4 ‘‘(2) identify where on the website published by 

5 the Internal Revenue Service the average amount of 

6 time in which an individual who files a Federal in7 come tax return can expect to receive a refund, 

8 ‘‘(3) in the case of a refund anticipation pay9 ment arrangement involving a depository account 

10 not controlled by the person receiving tax return 

11 preparation services or a prospective person to re12 ceive such services, describe— 

13 ‘‘(A) the difference in days between the av14 erage amount of time by which a person receiv15 ing tax return preparation services or a pro16 spective person to receive such services receives 

17 the tax refund (in whole or in part) from a re18 fund anticipation payment arrangement, and 

19 ‘‘(B) the average amount of time by which 

20 a person receiving tax return preparation serv21 ices or a prospective person to receive such 

22 services who files a Federal income tax return 

23 electronically receives the tax refund deposited 

24 directly to that person’s account by the taxing 

25 authority, 


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1 ‘‘(4) state that a refund anticipation payment 

2 arrangement is not necessary to receive a tax re3 fund, 

4 ‘‘(5) state that, if a person receiving tax return 

5 preparation services or a prospective person to re6 ceive such services does not receive a tax refund or 

7 the amount of the tax refund is less than the 

8 amount anticipated under the refund anticipation 

9 payment arrangement, the person receiving tax re10 turn preparation services or a prospective person to 

11 receive such services may be responsible for paying 

12 any fees and interest associated with a refund antici13 pation payment arrangement, and 

14 ‘‘(6) include any such other disclosures not 

15 specified in the preceding paragraphs to carry out 

16 this section that the Secretary deems appropriate. 

17 ‘‘(b) REFUND ANTICIPATION PAYMENT ARRANGE18 MENT DEFINED.—For purposes of this section, the term 

19 ‘refund anticipation payment arrangement’ means an ar20 rangement under which, in exchange for Federal income 

21 tax preparation services, a consumer agrees to pay a fee 

22 or interest upon receipt of the consumer’s tax refund to 

23 a tax return preparer, lender, or other affiliated lender 

24 by— 


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1 ‘‘(1) requesting the Federal Government to de2 posit such tax refund, in whole or in part, directly 

3 into a depository account designated by either the 

4 consumer or the tax return preparer, lender, or 

5 other affiliated lender, or 

6 ‘‘(2) directly paying the fee or interest to the 

7 tax return preparer, lender, or other affiliated lend8 er.’’. 

9 (b) FAILURE TO DISCLOSE.—Part I of subchapter 

10 B of chapter 68 of such Code is amended by adding at 

11 the end the following: 

12 ‘‘SEC. 6720D. FAILURE TO MEET DISCLOSURE REQUIRE13 MENTS FOR TAX RETURN PREPARERS. 

14 ‘‘(a) GENERAL RULE.—If a tax return preparer fails 

15 to meet the requirements of section 7813, the Secretary 

16 may impose a penalty of up to $1,000 per each such fail17 ure. 

18 ‘‘(b) PENALTY IN ADDITION TO OTHER PEN19 ALTIES.—The penalty imposed by this section shall be in 

20 addition to any other penalty imposed by law.’’. 

21 (c) CLERICAL AMENDMENTS.— 

22 (1) The table of sections for subchapter B of 

23 chapter 68 of such Code is amended by inserting 

24 after the item related to section 6720C the following 

25 new item: 


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‘‘Sec. 6720D. Failure to meet disclosure requirements for tax return preparers.’’. 

1 (2) The table of sections for subchapter A of 

2 chapter 80 of such Code is amended by inserting 

3 after the item related to section 7812 the following 

4 new item: 

‘‘Sec. 7813. Disclosure requirements for tax return preparers.’’. 

5 (d) EFFECTIVE DATE.—The amendments made by 

6 this section shall apply with respect to returns filed after 

7 December 31, 2021. 

Æ 


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