I 

116TH CONGRESS 

2D SESSION H. R. 8501 

To establish minimum competency standards for tax return preparers, and 

for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

OCTOBER 1, 2020 

Mr. VELA introduced the following bill; which was referred to the Committee 

on Ways and Means 

A BILL 

To establish minimum competency standards for tax return 

preparers, and for other purposes. 

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

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Tax-preparer Enforce5 ment, Accountability, and Minimum Standards Act’’ or 

6 the ‘‘TEAMS Act’’. 

7 SEC. 2. REGULATION OF TAX RETURN PREPARERS. 

8 (a) IN GENERAL.—Subsection (a) of section 330 of 

9 title 31, United States Code, is amended— 


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1 (1) by striking paragraph (1) and inserting the 

2 following: 

3 ‘‘(1) regulate— 

4 ‘‘(A) the practice of representatives of per5 sons before the Department of the Treasury; 

6 and 

7 ‘‘(B) the practice of tax return preparers; 

8 and’’; and 

9 (2) in paragraph (2)— 

10 (A) by inserting ‘‘or a tax return preparer 

11 to prepare tax returns’’ after ‘‘practice’’; 

12 (B) by inserting ‘‘or tax return preparer’’ 

13 before ‘‘demonstrate’’; 

14 (C) in subparagraph (C), by inserting ‘‘and 

15 minimum competency standards’’ after ‘‘nec16 essary qualifications’’; and 

17 (D) in subparagraph (D), by striking the 

18 period at the end and inserting ‘‘or in preparing 

19 their tax returns, claims for refund, or docu20 ments in connection with tax returns or claims 

21 for refund.’’ 

22 (b) AUTHORITY TO SANCTION REGULATED TAX RE23 TURN PREPARERS.—Subsection (c) of section 330 of title 

24 31, United States Code, is amended— 

25 (1) by striking ‘‘before the Department’’; 


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1 (2) by inserting ‘‘or tax return preparer’’ after 

2 ‘‘representative’’ each place it appears; and 

3 (3) in paragraph (4), by striking ‘‘misleads or 

4 threatens’’ and all that follows and inserting ‘‘mis5 leads or threatens— 

6 ‘‘(A) any person being represented or any 

7 prospective person being represented; or 

8 ‘‘(B) any person or prospective person 

9 whose tax return, claim for refund, or document 

10 in connection with a tax return or claim for re11 fund, is being or may be prepared.’’. 

12 (c) MINIMUM COMPETENCY STANDARDS FOR TAX

13 RETURN PREPARERS.—Section 330 of title 31, United 

14 States Code, is amended by adding at the end the fol15 lowing new subsection: 

16 ‘‘(f) MINIMUM COMPETENCY STANDARDS FOR TAX

17 RETURN PREPARERS.— 

18 ‘‘(1) IN GENERAL.—Any tax return preparer 

19 shall demonstrate minimum competency standards 

20 under this subsection by— 

21 ‘‘(A) obtaining an identifying number for 

22 securing proper identification of such preparer 

23 as described in section 6109(a)(4) of the Inter24 nal Revenue Code of 1986; 


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1 ‘‘(B) satisfying any examination and con2 tinuing education requirements as prescribed by 

3 the Secretary, including— 

4 ‘‘(i) holding a high school diploma or 

5 passing an equivalency exam; 

6 ‘‘(ii) completing 30 hours of tax prep7 aration training (or work deemed equiva8 lent); 

9 ‘‘(iii) passing a tax preparation exam 

10 with a score of 70 percent or greater every 

11 5 years; and 

12 ‘‘(iv) completing 15 hours of con13 tinuing education every 2 years; and 

14 ‘‘(C) completing a background check ad15 ministered by the Secretary which does not re16 turn any felony convictions. 

17 ‘‘(2) EXEMPTION.—The Secretary shall exempt 

18 tax return preparers who have been subject to com19 parable examination, continuing education require20 ments, and background checks administered by the 

21 Secretary or any comparable State licensing pro22 gram. Such exemption shall extend directly to indi23 viduals who are supervised by such preparers and 

24 are not required to secure an identification number 


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1 under section 6109(a)(4) of the Internal Revenue 

2 Code of 1986.’’. 

3 (d) TAX RETURN PREPARER DEFINED.—Section 

4 330 of title 31, United States Code, as amended by sub5 section (c), is amended by adding at the end the following 

6 new subsection: 

7 ‘‘(g) TAX RETURN PREPARER.—For purposes of this 

8 section— 

9 ‘‘(1) IN GENERAL.—The term ‘tax return pre10 parer’ has the meaning given such term under sec11 tion 7701(a)(36) of the Internal Revenue Code of 

12 1986. 

13 ‘‘(2) TAX RETURN.—The term ‘tax return’ has 

14 the meaning given to the term ‘return’ under section 

15 6696(e)(1) of the Internal Revenue Code of 1986. 

16 ‘‘(3) CLAIM FOR REFUND.—The term ‘claim for 

17 refund’ has the meaning given such term under sec18 tion 6696(e)(2) of such Code.’’. 

19 (e) AMENDMENTS WITH RESPECT TO IDENTIFYING

20 NUMBER.— 

21 (1) IN GENERAL.—Paragraph (4) of section 

22 6109(a) of the Internal Revenue Code of 1986 is 

23 amended to read as follows: 

24 ‘‘(4) FURNISHING IDENTIFYING NUMBER OF

25 TAX RETURN PREPARER.— 


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1 ‘‘(A) IN GENERAL.—Any return or claim 

2 for refund prepared by a tax return preparer 

3 shall bear such identifying number for securing 

4 proper identification of such preparer, his em5 ployer, or both, as may be prescribed. For pur6 poses of this paragraph, the terms ‘return’ and 

7 ‘claim for refund’ have the respective meanings 

8 given to such terms in section 6696(e). 

9 ‘‘(B) EXCEPTION.—Subparagraph (A) 

10 shall not apply to any tax return preparer who 

11 prepares a return or claim for refund under the 

12 supervision and direction of a tax return pre13 parer who signs the return or claim for refund 

14 and is a certified public accountant, an attorney 

15 or enrolled agent.’’. 

16 (2) CLARIFICATION OF RESCISSION AUTHOR17 ITY.—Section 6109 of such Code is amended by in18 serting after subsection (d) the following new sub19 section: 

20 ‘‘(e) AUTHORITY TO RESCIND IDENTIFYING NUM21 BER OF TAX RETURN PREPARER.— 

22 ‘‘(1) IN GENERAL.—The Secretary may rescind 

23 an identifying number issued under subsection 

24 (a)(4) if— 


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1 ‘‘(A) after notice and opportunity for a 

2 hearing, the preparer is shown to be incom3 petent or disreputable (as such terms are used 

4 in subsection (c) of section 330 of title 31, 

5 United States Code), and 

6 ‘‘(B) rescinding the identifying number 

7 would promote compliance with the require8 ments of this title and effective tax administra9 tion. 

10 ‘‘(2) RECORDS.—If an identifying number is re11 scinded under paragraph (1), the Secretary shall 

12 place in the file in the Office of the Director of Pro13 fessional Responsibility the opinion of the Secretary 

14 with respect to the determination, including— 

15 ‘‘(A) a statement of the facts and cir16 cumstances relating to the determination, and 

17 ‘‘(B) the reasons for the rescission.’’. 

Æ 


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