The Taxpayer Protection Act of 2016 was passed on Wednesday, April 20, 2016, to protect taxpayers from tax fraud and identity theft. The provisions of this law will provide a point of contact to help identity theft victims to help them receive their stolen or suspended (unfairly) tax refunds, and require the IRS (Internal Revenue Service) to issue a report with the Federal Communications Commission (FCC) and the Federal Trade Commission (FTC). This would protect individuals from phone scams in which fraudsters pretend to be IRS agents.
This act could potentially reform the IRS’s communications with people who blow the whistle on operations, letting the IRS get information from them when it could help in an investigation.
This new law did not have a provision regulating tax preparers despite that the most vulnerable of consumers are not protected from incompetent and deceitful tax preparers. In 2013, federal courts made invalid an attempt to make a registered tax return preparer program that mandated testing and continuing education for tax preparers, stating that the IRS did not have the authority of Congress to do so. At the moment, there are no minimum standards for paid tax preparers.
There was a survey completed in 2015 by the American Institute of CPAs (AICPA) which stated that 63% of CPAs had at least one client who was a victim of tax identity theft in the 2015 filing season. The AICPA supported the Taxpayer Protection Act of 2016. The goal of the competency and ethical standard is to guarantee the qualifications of the tax preparers. There was bipartisan support for this bill, and the aim is to help shield taxpayers from criminals who look to steal their identities and their money.
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