Protecting Taxpayers from Ghost Preparers Act

Nicole Malliotakis

Republican · NY · Representative

Source: Congress.gov · FEC

No cosponsors on record. Bills can pass without cosponsors — this often means the sponsor introduced the bill alone, either because it's a messaging bill, a chairman's mark, or simply early in the legislative cycle.

Ordered to be Reported in the Nature of a Substitute by the Yeas and Nays: 40 - 0.

2026-07-01

Source: Congress.gov

Protecting Taxpayers from Ghost Preparers Act This bill limits the amount of time the Internal Revenue Service (IRS) has to assess taxes related to fraudulent or false federal tax returns where there is no intent by the taxpayer to evade taxes. The bill also expands the types of documents for which various penalties may be imposed against tax return preparers. As background, the IRS generally has three years from the date that a tax return is filed (statute of limitations) to assess taxes owed by the taxpayer for the tax year. However, if a false or fraudulent tax return is filed with the intent to evade tax (fraud exception), then the IRS may assess taxes at any time. In Murrin v. Commissioner the U.S. Tax Court held (and the U.S. Court of Appeals for the Third Circuit affirmed) that the fraud exception applies when a tax return preparer places false or fraudulent entries on a tax return without the taxpayer’s knowledge. In contrast, the U.S. Court of Federal Claims held in BASR Partnership v. Commissioner that the fraud exception only applies if the taxpayer intends to evade taxes. The bill limits the fraud exception to cases in which the taxpayer intends to evade taxes. Further, under the bill, tax return preparers may be subject to penalties related to false or fraudulent documents purporting to be federal tax returns, partnership administrative adjustment requests, or partnership adjustment tracking reports. (Currently, the penalties apply if the documents are valid submissions to the IRS.)

Plain-English rewrite of the Congressional Research Service summary published on Congress.gov. Cached and reviewed.

[Congressional Bills 119th Congress] [From the U.S. Government Publishing Office] [H.R. 9499 Introduced in House (IH)] <DOC> 119th CONGRESS 2d Session H. R. 9499 To amend the Internal Revenue Code of 1986 to apply tax return preparation penalties to improperly altered returns, and for other purposes. _______________________________________________________________________ IN THE HOUSE OF REPRESENTATIVES June 29, 2026 Ms. Malliotakis 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 apply tax return preparation penalties to improperly altered returns, 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 ``Protecting Taxpayers from Ghost Preparers Act''. SEC. 2. PENALTIES FOR TAX RETURN PREPARERS WHO IMPROPERLY ALTER RETURNS. (a) In General.--Paragraph (1) of section 6696(e) of the Internal Revenue Code of 1986 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 request 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 subparagraphs (A) through (C).''. (b) Effective Date.--The amendment made by this section shall take effect on the date of the enactment of this Act. SEC. 3. LIMITATION PERIOD NOT EXTENDED FOR VICTIMS OF PREPARER FRAUD. (a) In General.--Section 6501(c)(1) of the Internal Revenue Code of 1986 is amended by inserting ``by the taxpayer'' after ``intent''. (b) Effective Date.--The amendment made by this section shall apply to assessments made or proceedings begun after the date of the enactment of this Act. SEC. 4. TECHNICAL AMENDMENT RELATED TO THE DISASTER RELATED EXTENSION OF DEADLINES ACT. (a) In General.--Subsection (f) of section 7508A of the Internal Revenue Code of 1986 (as added by the Disaster Related Extension of Deadlines Act) is redesignated as subsection (g). (b) Effective Date.--The amendment made by this subsection shall take effect as if included in section 2(a) of the Disaster Related Extension of Deadlines Act. <all>

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