The two leaders of the Senate Financial Committee — chairman Mike Crapo, R-Idaho, and ranking member Ron Wyden, D-Oregon — introduced a bipartisan legislative package containing a set of changes to Internal Revenue Service procedures and administration, as well as setting standards and penalties for paid tax preparers.
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The bill, known as the Taxpayer Assistance and Service Act, combines legislative proposals recommended by the National Taxpayer Advocate with standalone tax administration bills introduced by congressional members designed to improve communication between the IRS and taxpayers, streamline processes for tax compliance and ensure taxpayers have access to timely expert assistance, among other much-needed reforms.
“One of the most absurd things about our tax system is that its complexity forces millions of Americans to turn to paid tax return preparers every year, but there are zero minimum standards in place to ensure those paid preparers actually know what they’re doing or follow the law,” Wyden said in a statement Thursday. “Crooked tax return preparers are regularly exploiting taxpayers to pad their own bottom lines, and the worst part is, taxpayers might not even realize they’ve been ripped off until it’s too late. This bipartisan bill has been in the works for years, and it’s a major opportunity to improve IRS taxpayer service, protect taxpayers and help them get their refunds on time. I’m going to look for every available opportunity to get this bill passed.”
The bill includes provisions imposing penalties for tax return preparers who improperly alter returns, along with penalties for failure to provide valid preparer identification numbers, penalties for improper tax preparation or misappropriation of refunds, and gives the IRS the authority to deny, revoke or suspend Preparer Tax Identification Numbers for violations. A report released Tuesday by the Government Accountability Office recommended stricter oversight of paid tax return preparers.
Other provisions of the Taxpayer Assistance and Service Act would:
Digitize more tax returns to support faster refunds;Upgrade the “Where’s My Refund” tools so taxpayers know when to expect their refunds and what to do if they are delayed;Upgrade IRS online accounts so taxpayers and their representatives can review their returns and correspondence and respond to the IRS online;Protect taxpayers by strengthening standards for paid tax preparers;Expand IRS call-back options so taxpayers can request a return call more often and from more IRS phone numbers;Allow the U.S. Tax Court to hear cases relating to refunds;Increase the independence of the National Taxpayer Advocate and the IRS Independent Office of Appeals; andProtect victims of fraud from indefinite IRS scrutiny.
“The process of filing your tax return and receiving your refund should be simple and fast,” Crapo said in a statement. “These reforms will improve the taxpayer experience and help the IRS better serve Idahoans and all Americans.”
National Taxpayer Advocate Erin Collins praised the legislation. “I am grateful to Chairman Crapo and Ranking Member Wyden for the time and effort they and their staffs have invested to develop this broad and sweeping legislation that would strengthen taxpayer rights, reduce taxpayer burden, and improve tax administration,” Collins said in a statement. “This bill incorporates dozens of common-sense proposals to make tax administration fairer, more transparent, and more responsive to taxpayers.”
The National Association of Tax Professionals also said it supports the Taxpayer Assistance
and Service Act, saying it would strengthen tax administration, enhance transparency and modernize IRS service to taxpayers and tax professionals.
The NATP said Thursday it believes strong professional standards, including a continuing education requirement for paid tax return preparers, must remain central to reform. It supports the inclusion of a continuing education requirement tied to PTIN eligibility to ensure preparers remain current on evolving tax law and compliance obligations as tax law changes frequently. “The strength of our tax system depends on knowledgeable, ethical preparers who stay current and take responsibility for their work,” said NATP CEO Scott Artman in a statement. “Modernization matters, but meaningful education standards and fair oversight are essential to protecting taxpayers and maintaining trust in the profession.”
The group said the bill’s provisions related to PTIN oversight present an important opportunity to reinforce accountability within the tax preparation community, deter so-called “ghost preparers” who fail to identify themselves or intentionally mislead taxpayers, and enhance accountability for individuals who abuse the system.
The NATP said it also supports some of the other taxpayer service and administrative improvements included in the bill, including:
• Digitization of paper-filed returns and correspondence to reduce processing delays and backlogs;
• A public dashboard outlining service levels and wait times to increase transparency and help practitioners manage client expectations;
• Expanded electronic access to refund information, enhanced online account functionality and broader use of callback technology to improve efficiency and reduce unnecessary phone volume;
• Improvements to IRS notices, including math and clerical error communications, to reduce confusion and avoid unnecessary disputes;
• Section 903 addresses quarterly estimated income tax payments to improve alignment with fluctuating income and reduce inadvertent underpayment penalties;
• Provisions strengthening the role and effectiveness of the National Taxpayer Advocate in identifying systemic issues and assisting taxpayers experiencing hardship;
• Clear standards, proportional enforcement and strong due process protections in implementing expanded preparer oversight authority;
• Coordination of new preparer standards with Circular 230, state licensing requirements and
the IRS Annual Filing Season Program to avoid duplicative or conflicting obligations; and
• Standardized disaster-related postponements and extension of the mailbox rule to
electronic submissions to reflect modern filing practices and provide clarity.
“These reforms represent meaningful progress toward a more efficient, transparent and accountable tax administration system,” said the NATP.
