(3) in paragraph (4), by striking ‘‘misleads or 
threatens’’ and all that follows and inserting ‘‘mis-
leads or threatens— 
‘‘(A) any person being represented or any 
prospective person being represented; or 
‘‘(B) any person or prospective person 
whose return (as defined in section 6696(e)(1) 
of the Internal Revenue Code of 1986), claim 
for refund (as defined in section 6696(e)(2) of 
such Code), or document in connection with a 
return or claim for refund, is being or may be 
prepared.’’. 
(c) MINIMUM COMPETENCY STANDARDS FOR TAX 
RETURN PREPARERS.— 
(1) IN
GENERAL.—Section 330 of title 31, 
United States Code, is amended by adding at the 
end the following new subsection: 
‘‘(e) TAX RETURN PREPARERS.— 
‘‘(1) IN
GENERAL.—Any tax return preparer 
(as defined in section 7701(a)(36) of the Internal 
Revenue Code of 1986) shall demonstrate minimum 
competency standards under this subsection, by— 
‘‘(A) obtaining an identifying number for 
securing proper identification of such preparer 
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as described in section 6109(a)(4) of the Inter-
nal Revenue Code of 1986; 
‘‘(B) satisfying the examination require-
ments described in paragraph (2); 
‘‘(C) satisfying the annual continuing edu-
cation requirements described in paragraph (3); 
and 
‘‘(D) completing a background check as 
described in paragraph (4). 
‘‘(2) EXAMINATION.— 
‘‘(A) IN GENERAL.—A tax return preparer 
shall provide the Secretary with proof of suc-
cessful completion of an examination that evalu-
ates the knowledge and competency of the tax 
return preparer, as prescribed by the Secretary 
through regulations, forms or instructions, re-
garding— 
‘‘(i) preparation of a return (as de-
fined in section 6696(e)(1) of the Internal 
Revenue Code of 1986); 
‘‘(ii) ethical standards for preparation 
of such returns; and 
‘‘(iii) other topics as the Secretary 
may prescribe. 
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‘‘(B) EXCEPTIONS.—The Secretary shall 
exempt tax return preparers from the examina-
tion requirements under this paragraph pursu-
ant to such requirements as are determined ap-
propriate by the Secretary, which shall include 
any comparable examinations administered by 
the Secretary or any comparable State licensing 
or registration programs. 
‘‘(3) CONTINUING EDUCATION.—A tax return 
preparer shall complete continuing education on an 
annual basis, which shall consist of not less than 15 
hours of instruction, which shall include not less 
than 2 hours of training relating to ethics and not 
less than 3 hours relating to Federal tax law up-
dates. 
‘‘(4) BACKGROUND CHECK.— 
‘‘(A) IN GENERAL.—A tax return preparer 
shall demonstrate the requirements of sub-
section (a)(2) by providing the Secretary with a 
report, as prescribed by the Secretary through 
regulations, forms or instructions. 
‘‘(B) EXCEPTIONS.—The Secretary shall 
exempt tax return preparers who have been 
subject to comparable background checks ad-
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ministered by the Secretary or any comparable 
State licensing or registration programs.’’. 
(d) CONTINGENCY FEES.—The Secretary of the 
Treasury may not regulate, prohibit, or restrict the use 
of a contingent fee in connection with tax returns, claims 
for refund, or documents in connection with tax returns 
or claims for refund prepared on behalf of a taxpayer. 
(e) PUBLIC DATABASE
FOR TAX RETURN PRE-
PARERS.—Not later than 1 year after the date of the en-
actment of this Act, the Secretary of the Treasury, shall 
ensure that the name and identification number (as de-
scribed in section 6109(a)(4) of the Internal Revenue 
Code of 1986) of any tax return preparer who satisfies 
the requirements under section 330 of title 31, United 
States Code, is made publicly available through such 
measures as are determined appropriate by the Secretary, 
which may include the use of any publicly available data-
base that has been established and operated by the Sec-
retary on or before the date of the enactment of this Act. 
Æ 
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