3 versions

SubstantiveWhat changed in REPORTED IN HOUSEcompared with INTRODUCED IN HOUSE (Jun 29, 2026)

v2 significantly narrows the scope of the bill by deleting Section 2 from v1, which proposed new penalties for tax return preparers who improperly alter returns. The remaining provisions, concerning the limitation period for preparer fraud victims and a technical amendment, are retained but renumbered. This change removes a key enforcement mechanism against "ghost preparers."

H.R. 9499119th CongressIntroduced Jun 29, 2026

Protecting Taxpayers from Ghost Preparers Act

Passed HouseTaxationSubstantive

View bill text

Sponsor: Rep. Malliotakis, Nicole [R-NY-11]
Committees: Ways and Means Committee (primary)
Last action: Sep 16, 2026

Bottom line

The bill seeks to protect taxpayers from indefinite IRS liability due to preparer-only fraud and includes a minor technical correction to the tax code.

What it actually does

This bill amends the Internal Revenue Code of 1986 to clarify that the unlimited statute of limitations for assessing taxes in cases of fraud applies only when the fraudulent intent originates "by the taxpayer." This change aims to protect taxpayers who are victims of fraudulent tax preparers. Additionally, it makes a technical amendment to re-designate a subsection within the code related to disaster-related deadline extensions.

Proponents argue

Proponents argue that this bill provides crucial protection for innocent taxpayers who rely on tax preparers, ensuring they are not indefinitely penalized for fraud they did not commit or intend. They contend it brings fairness and clarity to the tax code, preventing the IRS from pursuing assessments years later against unsuspecting individuals who were victims of unscrupulous preparers.

Opponents contend

Opponents might argue that this amendment could inadvertently create a loophole, making it more challenging for the IRS to combat tax fraud effectively, especially in cases where taxpayers might claim ignorance of a preparer's fraudulent actions. They could contend it shifts the burden of proof too heavily onto the IRS, potentially allowing some fraudulent activity to go unpunished.

The bill is exceptionally short and clearly written, making it highly accessible for a quick and thorough understanding.

Section 2(a) of H.R. 9499, amending Section 6501(c)(1) of the Internal Revenue Code of 1986.

Limitation Period Not Extended for Victims of Preparer Fraud

prominently featuredstraightforward

This provision amends the Internal Revenue Code to specify that the unlimited statute of limitations for assessing taxes in cases of false or fraudulent returns only applies if the fraudulent intent originated "by the taxpayer." Previously, the language could be interpreted to extend the limitation period even if the fraud was solely committed by a tax preparer without the taxpayer's knowledge or intent. This change aims to protect taxpayers who are victims of "ghost preparers" or other fraudulent preparers.

GroupImpactMechanismScale

GroupIndividual taxpayersImpactReduced liability riskMechanismLimits the IRS's ability to assess taxes indefinitely in cases where fraud is solely attributable to a preparer without taxpayer intent.ScalePotentially affects many taxpayers who use preparers and could be victims of fraud.

GroupInternal Revenue Service (IRS)ImpactModified enforcement scopeMechanismRequires proof of taxpayer intent for unlimited assessment periods in fraud cases, potentially altering investigative procedures.ScaleMinor adjustment to enforcement procedures and legal interpretations.

Supporters argue

Supporters argue this provision provides crucial protection for innocent taxpayers who rely on tax preparers, ensuring they are not indefinitely penalized for fraud they did not commit or intend. It aligns the law with principles of fairness and due process, preventing the IRS from pursuing assessments years later against unsuspecting individuals.

Critics contend

Critics might contend that this amendment could create a loophole, making it more challenging for the IRS to combat tax fraud effectively, especially in cases where taxpayers might claim ignorance of a preparer's fraudulent actions. They might argue it shifts the burden of proof too heavily onto the IRS, potentially allowing some fraudulent activity to go unpunished.

Tradeoffs

The provision balances the protection of innocent taxpayers from preparer fraud against the IRS's ability to pursue and penalize all forms of tax fraud. It seeks to prevent overreach by the IRS while still allowing for enforcement against genuinely fraudulent taxpayers.

Section 3(a) of H.R. 9499, redesignating subsection (f) of section 7508A of the Internal Revenue Code of 1986 as subsection (g).

Technical Correction to Disaster Deadlines Act

mentioned in summarystraightforward

This section makes a technical correction to the Internal Revenue Code by re-designating a subsection (f) within Section 7508A (which deals with disaster-related extensions of deadlines) to subsection (g). This is likely to resolve a numbering conflict or ensure proper sequencing of amendments made by the "Disaster Related Extension of Deadlines Act." It does not change the substance of the law regarding disaster extensions.

About this analysis. AI-Generated from the official bill text and available committee reports. Gaps in available data are noted explicitly. Verify important details with the official Congress.gov record.