SEC. 3. REFERRAL PROCEDURES FOR RECOVERY OF RE-
FUNDS FOR TAXPAYERS DEFRAUDED BY EM-
PLOYEES OR AGENTS OF TAX PREPARATION 
FIRMS. 
The Secretary of the Treasury (or the Secretary’s 
delegate) shall develop referral procedures for, and estab-
lish a liaison to, tax preparation firms to seek recovery 
of refunds for taxpayers defrauded by employees or agents 
of tax preparation firms. In developing such procedures, 
the Secretary (or the Secretary’s delegate) shall ensure 
that there is coordination among the following entities 
within the Internal Revenue Service: Taxpayer Advocate 
Service, Wage & Investment Division, Criminal Investiga-
tion, Office of the Chief Counsel, Return Preparer Office, 
and Office of Professional Responsibility. 
SEC. 4. COMPREHENSIVE GUIDANCE FOR THE TREATMENT 
OF ALL CLAIMS FOR REFUNDS RELATING TO 
TAX RETURN PREPARER FRAUD. 
(a) IN GENERAL.—The Secretary of the Treasury (or 
the Secretary’s delegate) shall develop comprehensive 
guidance for the treatment by the Internal Revenue Serv-
ice of all claims for refunds relating to tax return preparer 
fraud. Such guidance shall provide a clear description the 
rights and responsibilities of taxpayers, including the fol-
lowing: 
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(1) MITIGATION.—Actions taken by the tax-
payer to prevent the preparer fraud or to minimize 
the loss. 
(2) RESTITUTION.—Actions taken by the tax-
payer to receive restitution relating to tax return 
preparer fraud and whether the taxpayer has re-
ceived any restitution. 
(3) SUBSTANTIATION.—Actions taken by the 
taxpayer to substantiate a claim of fraud, including 
one or more of the following, if available: 
(A) Providing a copy of the unaltered re-
turn of tax (if provided by the preparer). 
(B) Providing a business card, flyer, or 
other advertisement with the preparer’s contact 
information. 
(C) Providing a copy of any refund traces 
requested. 
(D) Providing a copy of bank statements 
showing the expected refund was not deposited 
into the victim’s account. 
(E) Providing a taxpayer statement re-
garding the fraud, which shall be signed under 
penalties of perjury. 
(F) Filing a report or complaint with local 
law enforcement authorities. 
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(b) GUIDANCE RELATING
TO RESTITUTION.—The 
Secretary shall, in the guidance developed for restitu-
tion— 
(1) place the emphasis on restitution received 
by the taxpayer and making the taxpayer whole rel-
ative to the cash value of assets that have already 
been transferred to the taxpayer, 
(2) not reduce restitution on the basis of either 
anticipated or court mandated (but not yet collected) 
payments, and 
(3) provide for a claw-back procedure to ensure 
that restitution ultimately paid to the taxpayer, sub-
sequent to the restitution provided by the Internal 
Revenue Service, would be remitted to the Internal 
Revenue Service. 
Æ 
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