TEAMS Act
Bill: H.R.3737 | Sponsor: Rep. Vela, Filemon (D-TX)
Policy area: Taxation

Summary:
Tax-preparer Enforcement, Accountability, and Minimum Standards Act or the TEAMS Act
This bill 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.

To establish minimum competency standards for tax return preparers, and 
                          for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Tax-preparer Enforcement, 
Accountability, and Minimum Standards Act'' or the ``TEAMS Act''.

SEC. 2. 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'' after ``practice'';
                    (B) by inserting ``or tax return preparer'' before 
                ``demonstrate'';
                    (C) in subparagraph (C), by inserting ``and minimum 
                competency standards'' after ``necessary 
                qualifications''; and
                    (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 striking ``before the Department'';
            (2) by inserting ``or tax return preparer'' after 
        ``representative'' each place it appears; and
            (3) in paragraph (4), by striking ``misleads or threatens'' 
        and all that follows and inserting ``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.--Any 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) of the Internal Revenue Code of 
                1986;
                    ``(B) satisfying any examination and continuing 
                education requirements as prescribed by the Secretary, 
                including--
                            ``(i) holding a high school diploma or 
                        passing an equivalency exam;
                            ``(ii) completing 30 hours of tax 
                        preparation training (or work deemed 
                        equivalent);
                            ``(iii) passing a tax preparation exam with 
                        a score of 70 percent or greater every 5 years; 
                        and
                            ``(iv) completing 15 hours of continuing 
                        education every 2 years; and
                    ``(C) completing a background check administered by 
                the Secretary which does not return any felony 
                convictions.
            ``(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. 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) of the 
        Internal Revenue Code of 1986.''.
    (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' has the 
        meaning given such term under section 7701(a)(36) of the 
        Internal Revenue Code of 1986.
            ``(2) Tax return.--The term `tax return' has the meaning 
        given to the term `return' under section 6696(e)(1) of the 
        Internal Revenue Code of 1986.
            ``(3) Claim for refund.--The term `claim for refund' has 
        the meaning given such term under section 6696(e)(2) of such 
        Code.''.
    (e) Amendments With Respect to Identifying Number.--
            (1) In general.--Paragraph (4) of section 6109(a) of the 
        Internal Revenue Code of 1986 is amended to read as follows:
            ``(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' and `claim for refund' have the respective 
                meanings given to such terms in section 6696(e).
                    ``(B) Exception.--Subparagraph (A) shall not apply 
                to any tax return preparer who prepares a return or 
                claim for refund under the supervision and direction of 
                a tax return preparer who signs the return or claim for 
                refund and is a certified public accountant, an 
                attorney 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.''.
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