This bill, called the Taxpayer Protection and Preparer Proficiency Act, cracks down on tax return preparers—the professionals who help people file their taxes—by increasing penalties and adding new requirements to keep them accountable.

The main changes include: tax preparers must now include their identification numbers on returns or face $250 penalties (up from $50), with yearly caps of $50,000 to $75,000 depending on the violation type. The bill creates stricter rules for who can become a tax preparer, requiring background checks, education on ethics and tax law, and compliance with personal tax obligations. Tax preparers who willfully use fake or invalid identification numbers face criminal penalties. The IRS also gets new power to suspend or revoke a preparer's credentials if they make repeated errors, commit fraud, or violate professional standards.

Additionally, the bill extends these rules to people who prepare offer-in-compromise documents (settlement agreements with the IRS) and requires the IRS to maintain a public database of disciplined preparers. Electronic filing preparers must use valid electronic filing identification numbers or face the same penalties. The bill also requires the IRS to give preparers a chance to fix missing identification numbers before imposing penalties, and it mandates the IRS publish the most common tax return errors and reasons preparers get disciplined. Overall, this legislation aims to improve the quality of tax preparation services and protect taxpayers from unqualified or dishonest preparers.