System Transparency and Accountability for the IRS Act

To move the taxpayer bill of rights to the front of the Internal Revenue Code of 1986, to establish minimum competency standards for tax return preparers, and for other purposes. 1. Short title This Act may be cited as the System Transparency and Accountability for the IRS Act 2. Prominent display of taxpayer bill of rights (a) In general The Internal Revenue Code of 1986 is amended by striking section 7803(a)(3) and by inserting the following before subtitle A: In discharging his duties, the Commissioner of Internal Revenue shall ensure that employees of the Internal Revenue Service are familiar with and act in accord with taxpayer rights as afforded by other provisions of this title, including— (1) the right to be informed, (2) the right to quality service, (3) the right to pay no more than the correct amount of tax, (4) the right to challenge the position of the Internal Revenue Service and be heard, (5) the right to appeal a decision of the Internal Revenue Service in an independent forum, (6) the right to finality, (7) the right to privacy, (8) the right to confidentiality, (9) the right to retain representation, and (10) the right to a fair and just tax system. . (b) Effective date The amendments made by this section shall take effect on the date of the enactment of this Act. 3. Regulation of tax return preparers (a) In general Subsection (a) of section 330 of title 31, United States Code, is amended— (1) by striking paragraph (1) and inserting the following: (1) regulate— (A) the practice of representatives of persons before the Department of the Treasury; and (B) the practice of tax return preparers; and ; and (2) in paragraph (2)— (A) by inserting or a tax return preparer to prepare tax returns practice (B) by inserting or tax return preparer demonstrate (C) in subparagraph (C), by inserting and minimum competency standards necessary qualifications (D) in subparagraph (D), by striking the period at the end and inserting or in preparing their tax returns, claims for refund, or documents in connection with tax returns or claims for refund. (b) Authority To sanction regulated tax return preparers Subsection (c) of section 330 of title 31, United States Code, is amended— (1) by inserting or tax return preparer representative (2) in paragraph (4), by striking misleads or threatens misleads or threatens— (A) any person being represented or any prospective person being represented; or (B) any person or prospective person whose tax return, claim for refund, or document in connection with a tax return or claim for refund, is being or may be prepared. . (c) Minimum competency standards for tax return preparers Section 330 of title 31, United States Code, is amended by adding at the end the following new subsection: (f) Minimum competency standards for tax return preparers (1) In general Except as provided in paragraph (2), a tax return preparer shall demonstrate minimum competency standards under this subsection by— (A) obtaining an identifying number for securing proper identification of such preparer as described in section 6109(a)(4) (B) satisfying any examination and annual continuing education requirements as prescribed by the Secretary; and (C) completing a background check administered by the Secretary. (2) Exemption The Secretary shall exempt tax return preparers who have been subject to comparable examination, continuing education requirements, and background checks administered by the Secretary or any comparable State licensing program from the applicable requirements of paragraph (1). Such exemption shall extend directly to individuals who are supervised by such preparers and are not required to secure an identification number under section 6109(a)(4) (3) Reinstatement of registered tax return preparer program The Secretary shall issue regulations under this section reinstating the Registered Tax Return Preparer Program. Examination of tax return prepares under such program shall be limited to a one-time, basic individual income tax examination and the annual continuing education requirement under such program shall not exceed 15 hours. . (d) Tax return preparer defined Section 330 of title 31, United States Code, as amended by subsection (c), is amended by adding at the end the following new subsection: (g) Tax return preparer For purposes of this section— (1) In general The term tax return preparer section 7701(a)(36) (2) Tax return The term tax return return section 6696(e)(1) (3) Claim for refund The term claim for refund . (e) Amendments with respect to identifying number (1) In general Paragraph (4) of section 6109(a) (4) Furnishing identifying number of tax return preparer (A) In general Any return or claim for refund prepared by a tax return preparer shall bear such identifying number for securing proper identification of such preparer, his employer, or both, as may be prescribed. For purposes of this paragraph, the terms return claim for refund (B) Exception Subparagraph (A) shall not apply with respect to the preparation of any return or claim for refund by a tax return preparer if— (i) such return or claim is prepared by such preparer while such preparer is employed by an attorney, certified public accountant, or enrolled agent firm, and (ii) such preparer prepares such return or claim under the supervision and direction of a tax return preparer who signs such return or claim and is an attorney, certified public accountant, or enrolled agent. . (2) Clarification of rescission authority Section 6109 of such Code is amended by inserting after subsection (d) the following new subsection: (e) Authority To rescind identifying number of tax return preparer (1) In general The Secretary may rescind an identifying number issued under subsection (a)(4) if— (A) after notice and opportunity for a hearing, the preparer is shown to be incompetent or disreputable (as such terms are used in subsection (c) of section 330 of title 31, United States Code), and (B) rescinding the identifying number would promote compliance with the requirements of this title and effective tax administration. (2) Records If an identifying number is rescinded under paragraph (1), the Secretary shall place in the file in the Office of the Director of Professional Responsibility the opinion of the Secretary with respect to the determination, including— (A) a statement of the facts and circumstances relating to the determination, and (B) the reasons for the rescission. . (3) Effective date The amendments made by this section shall take effect on the date which is 180 days after the date of the enactment of this Act. 4. Report Not later than 180 days after the date of the enactment of this Act, the Secretary of the Treasury (or the Secretary’s delegate) shall submit to Congress a report detailing the implementation of tax preparer minimum standards under section 330(f) of title 31, United States Code (as added by this Act).

Summary: System Transparency and Accountability for the IRS Act This bill requires the Internal Revenue Service to ensure that its employees are familiar with basic taxpayer rights, including the right to be informed, the right to quality service, and the right to privacy and confidentiality. The bill also authorizes the Department of the Treasury to regulate tax return preparers, including by sanctioning preparers for incompetence and disreputable behavior and by establishing minimum competency standards for preparers.