Judy Chu

Not analysed yet

A requested analysis is usually ready within half an hour; come back to this page or reload it.

Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I rise today in support of H.R. 9499, the Protecting Taxpayers from Ghost Preparers Act. I thank my colleague, Ms. Malliotakis, for her leadership on this bill. This bill helps victims of tax fraud by ensuring that the IRS is penalizing the bad actor and not the taxpayer. The bill addresses circumstances under which a tax preparer commits fraud without the knowledge of the taxpayer. The taxpayer may not find out about a false or fraudulent return until years after it was filed, when the IRS audits the return. Under current law, the IRS generally must begin an audit within 3 years after a return is filed. This is commonly referred to as a 3-year statute of limitations. However, when a return involves fraud with an intent to evade tax, the IRS has an indefinite amount of time to audit the return. In other words, there is no statute of limitations. Current law does not distinguish as to when the fraud is committed by a taxpayer or when it is committed by a third party, such as the taxpayer's return preparer who files a false or fraudulent return with the intent to evade tax. In both situations, the statute of limitations for audits is held open indefinitely, and the taxpayer is on the hook. The bill would fix this trap for unwitting taxpayers. The bill provides that misconduct solely by a third party, such as the taxpayer's return preparer, can no longer indefinitely suspend the statute of limitations for a taxpayer. It makes clear that only an intent to evade tax by the taxpayer would hold the statute of limitations open indefinitely for a taxpayer. This bill protects innocent taxpayers from being indefinitely exposed to IRS enforcement actions when a false or fraudulent return was filed by the return preparer without the taxpayer's knowledge. Mr. Speaker, this bill is a step in the right direction for protecting taxpayers from fraudulent preparers. Mr. Speaker, I reserve the balance of my time.