I 
119TH CONGRESS 
1ST SESSION H. R. 6323 
To amend the Internal Revenue Code of 1986 to penalize improper compliance 
with certain taxpayer requirements, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
NOVEMBER 28, 2025 
Mr. PANETTA (for himself and Mr. STEUBE) introduced the following bill; 
which was referred to the Committee on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to penalize 
improper compliance with certain taxpayer requirements, 
and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; ETC. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Taxpayer Protection and Preparer Proficiency Act’’. 
(b) REFERENCES TO INTERNAL REVENUE CODE.— 
Except as otherwise expressly provided, whenever in this 
Act an amendment is expressed in terms of an amendment 
to a section or other provision, the reference shall be con-
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sidered to be made to a section or other provision of the 
Internal Revenue Code of 1986. 
(c) REFERENCES TO SECRETARY.—For purposes of 
this Act, the term ‘‘Secretary’’ means the Secretary of the 
Treasury or the Secretary’s delegate. 
SEC. 2. PENALTIES FOR TAX RETURN PREPARERS WHO IM-
PROPERLY ALTER RETURNS. 
(a) IN GENERAL.—Paragraph (1) of section 6696(e) 
is amended to read as follows: 
‘‘(1) RETURN.—The term ‘return’ means— 
‘‘(A) any return of any tax imposed by this 
title, 
‘‘(B) any administrative adjustment re-
quest under section 6227, 
‘‘(C) any partnership adjustment tracking 
report under section 6226(b)(4)(A), and 
‘‘(D) any other document purporting to be 
a return, request, or report described in sub-
paragraphs (A) through (C).’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall take effect on the date of enactment of 
this Act. 
SEC. 3. PENALTIES FOR INVALID OR APPROPRIATED PRE-
PARER IDENTIFICATION NUMBERS. 
(a) IN GENERAL.—Section 6695 is amended— 
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(1) by striking subsection (c) and inserting the 
following: 
‘‘(c) FAILURE TO FURNISH VALID IDENTIFYING 
NUMBER.— 
‘‘(1) IN GENERAL.— 
‘‘(A) PENALTY.—Any person who is a tax 
return preparer with respect to any return or 
claim for refund and who fails to furnish an 
identifying number which complies with section 
6109(a)(4)(A) with respect to such return or 
claim shall pay a penalty of $250 for such fail-
ure. 
‘‘(B) NON-COMPLIANCE.—For purposes of 
this paragraph, an identifying number shall be 
deemed 
to 
not 
comply 
with 
section 
6109(a)(4)(A) if such identifying number— 
‘‘(i) is assigned to another person, 
‘‘(ii) does not exist, 
‘‘(iii) is inactive or expired, 
‘‘(iv) has been withdrawn, 
‘‘(v) is suspended or has been revoked, 
or 
‘‘(vi) is otherwise invalid for use by 
the tax return preparer. 
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‘‘(2) EXCEPTION.—The penalty imposed under 
paragraph (1) shall not apply if it is shown that 
such failure is due to reasonable cause and not due 
to willful neglect. 
‘‘(3) LIMITATION.—The maximum penalty im-
posed under this subsection on any person with re-
spect to documents filed during any calendar year 
shall not exceed $75,000.’’, 
(2) by redesignating subsection (h) as sub-
section (i), 
(3) by inserting after subsection (g) the fol-
lowing new subsection: 
‘‘(h) USE
OF INVALID
OR APPROPRIATED ELEC-
TRONIC FILING IDENTIFICATION NUMBER.— 
‘‘(1) IN GENERAL.—Any person who is an elec-
tronic return originator with respect to any return 
or claim for refund who fails to use, with respect to 
such return or claim, an electronic filing identifica-
tion number which is assigned to such person by the 
Secretary, shall pay a penalty of $250 for such fail-
ure, unless it is shown that such failure is due to 
reasonable cause and not due to willful neglect. 
‘‘(2) DEFINITIONS.—For purposes of this sub-
section— 
‘‘(A) ELECTRONIC RETURN ORIGINATOR.— 
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‘‘(i) IN
GENERAL.—The term ‘elec-
tronic return originator’ means a person 
who originates the electronic submission of 
1 or more returns or claims for refund on 
behalf of other taxpayers. 
‘‘(ii) EXCEPTIONS.—The term ‘elec-
tronic return originator’ shall not include a 
person merely because such person origi-
nates an electronic submission described in 
clause (i)— 
‘‘(I) by furnishing mechanical as-
sistance to a person described in such 
subclause, 
‘‘(II) at the direction of an em-
ployer (or of an officer or employee of 
the employer) by whom such person is 
regularly and continuously employed, 
‘‘(III) as a fiduciary, or 
‘‘(IV) in response to a determina-
tion that directly or indirectly affects 
the tax liability of a taxpayer. 
‘‘(B) ELECTRONIC FILING IDENTIFICATION 
NUMBER.— 
‘‘(i) IN
GENERAL.—The term ‘elec-
tronic filing identification number’ means 
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an identification number assigned by the 
Secretary to a person authorized to file re-
turns in electronic format on behalf of 
other taxpayers. 
‘‘(ii) SUSPENSION OR REVOCATION.— 
In the case of any electronic filing identi-
fication number which has been suspended 
or revoked by the Secretary, such number 
shall not be deemed valid for purposes of 
paragraph (1).’’, and 
(4) in subsection (i)(1), as redesignated by 
paragraph (2), by striking ‘‘and (g)’’ and inserting 
‘‘(g), and (h)’’. 
(b) MODIFICATION OF DEFINITION OF TAX RETURN 
PREPARER.—Section 7701(a)(36) is amended— 
(1) by striking subparagraph (A) and inserting 
the following: 
‘‘(A) IN GENERAL.—The term ‘tax return 
preparer’ means any person who prepares for 
compensation, or who employs one or more per-
sons to prepare for compensation, any return of 
tax imposed by this title, any document pur-
porting to be a return of tax imposed by this 
title, or any claim for refund of tax imposed by 
this title. For purposes of the preceding sen-
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tence, the preparation of a substantial portion 
of a return, document purporting to be a re-
turn, or claim for refund shall be treated as if 
it were the preparation of such return, docu-
ment purporting to be a return, or claim for re-
fund.’’, and 
(2) in subparagraph (B)— 
(A) in clause (ii), by striking ‘‘return or 
claim for refund’’ and inserting ‘‘return, docu-
ment purporting to be a return, or claim for re-
fund’’, and 
(B) in clause (iii), by striking ‘‘return or 
claim for refund’’ and inserting ‘‘return, docu-
ment purporting to be a return, or claim for re-
fund’’. 
(c) PREVENTION OF INADVERTENT ERRORS INVOLV-
ING IDENTIFYING NUMBERS.— 
(1) IN GENERAL.—Not later than 18 months 
after the date of enactment of this Act, the Sec-
retary shall establish a program to improve vol-
untary compliance with respect to requirements 
under subsections (c) and (h) of section 6695 of the 
Internal Revenue Code of 1986 (as amended by this 
section) and avoid the imposition of penalties under 
such subsections. 
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(d) CRIMINAL PENALTY.— 
(1) IN GENERAL.—Part I of subchapter A of 
chapter 75 is amended by adding at the end the fol-
lowing new section: 
‘‘SEC. 7218. WILLFUL MISUSE OR MISAPPROPRIATION OF 
IDENTIFYING NUMBER. 
‘‘(a) IN GENERAL.—Any tax return preparer who, 
with respect to any return, document purporting to be a 
return, or claim for refund— 
‘‘(1) willfully fails to furnish a valid preparer 
tax identification number with intent to evade or de-
feat the application of any requirement under any 
provision of this title which requires such preparer 
to obtain and furnish such number, 
‘‘(2) willfully furnishes a preparer tax identi-
fication number which— 
‘‘(A) does not exist, 
‘‘(B) is inactive or expired, 
‘‘(C) has been withdrawn, 
‘‘(D) is suspended or has been revoked, or 
‘‘(E) is otherwise invalid for use by such 
tax return preparer, or 
‘‘(3) willfully furnishes a preparer tax identi-
fication number which is assigned to another person, 
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shall, in addition to any other penalties provided by law, 
be guilty of a felony and, upon conviction thereof, shall 
be fined not more than $50,000 ($100,000 in the case 
of a corporation), or imprisoned not more than 2 years, 
or both, together with the costs of prosecution. 
‘‘(b) PREPARER TAX IDENTIFICATION NUMBER.— 
The term ‘preparer tax identification number’ means an 
identifying number described in section 6109(a)(4)(A).’’. 
(2) CLERICAL AMENDMENT.—The table of sec-
tions for part I of subchapter A of chapter 75 is 
amended by adding at the end the following new 
item: 
‘‘Sec. 7218. Willful misuse or misappropriation of identifying number.’’. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to returns or claims for refund 
filed after the date which is 18 months after the date of 
enactment of this Act. 
SEC. 4. PENALTIES FOR IMPROPER TAX PREPARATION OR 
MISAPPROPRIATION OF REFUNDS. 
(a) OTHER ASSESSABLE PENALTIES WITH RESPECT 
TO THE PREPARATION OF TAX RETURNS FOR OTHER 
PERSONS.—Section 6695, as amended by the preceding 
provisions of this Act, is amended— 
(1) in subsection (a)— 
(A) by striking ‘‘$50’’ and inserting 
‘‘$250’’, and 
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(B) by striking ‘‘$25,000’’ and inserting 
‘‘$50,000’’, 
(2) in subsection (b)— 
(A) by striking ‘‘$50’’ and inserting 
‘‘$250’’, and 
(B) by striking ‘‘$25,000’’ and inserting 
‘‘$75,000’’, 
(3) in subsection (d)— 
(A) by striking ‘‘$50’’ and inserting 
‘‘$250’’, and 
(B) by striking ‘‘$25,000’’ and inserting 
‘‘$50,000’’, 
(4) in subsection (e)— 
(A) by striking ‘‘$50’’ and inserting 
‘‘$250’’, and 
(B) by striking ‘‘$25,000’’ and inserting 
‘‘$75,000’’, 
(5) in subsection (g), by striking ‘‘$500’’ and 
inserting ‘‘$1,000’’, and 
(6) in subsection (i)(1)— 
(A) by striking ‘‘2014’’ and inserting 
‘‘2024’’, and 
(B) by striking ‘‘calendar year 2013’’ and 
inserting ‘‘calendar year 2023’’. 
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(b) MISAPPROPRIATION
OF
ELECTRONIC
FUNDS 
TRANSFER.— 
(1) IN
GENERAL.—Subsection (f) of section 
6695 is amended to read as follows: 
‘‘(f) NEGOTIATION
OF
CHECK; MISAPPROPRIA-
TION.— 
‘‘(1) IN GENERAL.—Any person who is a tax re-
turn preparer who— 
‘‘(A) endorses or otherwise negotiates (di-
rectly or through an agent) any check made in 
respect of the taxes imposed by this title which 
is issued to a taxpayer (other than the tax re-
turn preparer), or 
‘‘(B) misappropriates any refund (or ad-
vance payment with respect to a refundable 
credit), or any portion thereof, issued to any 
taxpayer through an electronic funds transfer, 
shall pay a penalty in an amount determined under 
paragraph (2). 
‘‘(2) PENALTY.—The amount of the penalty de-
termined under this paragraph shall, with respect to 
each check or transfer described in paragraph (1), 
be equal to the greater of— 
‘‘(A) $1,000, or 
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‘‘(B) the full amount of such check or 
transfer. 
‘‘(3) EXCEPTION.—Paragraph (1)(A) shall not 
apply with respect to the deposit by a bank (within 
the meaning of section 581) of the full amount of 
the check in the taxpayer’s account in such bank for 
the benefit of the taxpayer.’’. 
(2) 
CONFORMING
AMENDMENT.—Section 
6695(i)(1) is amended by striking ‘‘(f),’’ and insert-
ing ‘‘(f)(2)(A),’’. 
SEC. 5. AUTHORITY TO DENY, REVOKE, OR SUSPEND PRE-
PARER TAX IDENTIFICATION NUMBERS. 
(a) IN GENERAL.—Section 6109 is amended— 
(1) in subsection (a), by striking paragraph (4) 
and inserting the following: 
‘‘(4) FURNISHING
IDENTIFYING
NUMBER
OF 
TAX RETURN PREPARER.— 
‘‘(A) IN GENERAL.—Any return or claim 
for refund which is prepared by a tax return 
preparer shall bear such identifying number for 
securing proper identification of such preparer, 
their employer, or both, as may be prescribed. 
‘‘(B) EXCEPTION
FOR
SUPERVISED
PRE-
PARER.—Subparagraph (A) shall not apply with 
respect to any tax return preparer who prepares 
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