Two Democrats in Congress have introduced a bill in the House and Senate to protect taxpayer rights and regulate tax preparers.

Sen. Ben Cardin, D-Md., a member of the Senate Finance Committee, and Rep. Xavier Becerra, D-Calif., the House Democratic Caucus Chairman and a member of the House Ways and Means Committee, introduced the Taxpayer Rights Act of 2015 in both chambers of Congress Tuesday. The legislation aims to improve Internal Revenue Service procedures and services to protect the rights of all U.S. taxpayers. 

In addition to giving the IRS the ability to regulate all paid tax return preparers, the Taxpayer Rights Act would codify 10 primary taxpayer rights, as well as strengthen programs and other rules related to the preparation of tax returns, improve IRS lien and levy procedures, including procedures related to retirement accounts, and enhance the ability of the Office of the National Taxpayer Advocate to further aid and protect taxpayers.

One provision would increases the minimum penalty for tax preparers from $50 to $1,000 for not providing the taxpayer with a copy of his final return, not signing the return, or not providing an identification number. The $25,000 annual cap on penalties for these violations would also be eliminated.

A section-by-section summary of the bill is available here and the text of the bill is available here.

“Americans of all income levels deserve to know their basic rights as taxpayers and that the federal government, including the IRS, is protecting those rights,” Cardin said in a statement. “Our current tax system is complicated and the Taxpayer Rights Act will ensure that U.S. households with modest means have access to quality return preparation, along with the same knowledge and protection of their rights as other U.S. households. We have an obligation to strengthen the financial security and privacy of taxpayers.”

The provisions of the Taxpayer Rights Act come from recommendations included in the National Taxpayer Advocate’s Annual Reports to Congress. The bill also builds on the Portman-Cardin Internal Revenue Service Restructuring and Reform Act of 1998, which, among other things, created the National Taxpayer Advocate and improved the IRS’s lien and collection practices to better protect taxpayers.

"Any discussion of tax reform needs to include ideas to boost access to IRS service and information, especially for modest income Americans, to help taxpayers complete one of their most important financial transactions of the year,” said Becerra. “Our bill will increase access to quality tax preparation, help ensure taxpayers know their rights, and improve taxpayer services at the IRS.”

National Taxpayer Advocate Nina Olson praised the bill, saying, “The Taxpayer Rights Act of 2015 incorporates many proposals I have made and would substantially benefit our nation's taxpayers. It would establish in law a fundamental Taxpayer Bill of Rights; enable the IRS to create minimum standards for unenrolled tax return preparers; expand tax return and representation programs for low income taxpayers; protect taxpayers from unwarranted lien-filings and levies, including levies on retirement account assets; and strengthen the independence of the Office of the Taxpayer Advocate."

Separately on Tuesday, a pair of Republican lawmakers in the House, Rep. Diane Black, R-Tenn., and Pat Meehan, R-Pa., introduced a bill to regulate tax preparers, the Tax Return Preparer Competency Act (see Congress Introduces New Bill to Regulate Tax Preparers).

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