I 112th CONGRESS 2d Session H. R. 5630 IN THE HOUSE OF REPRESENTATIVES May 8, 2012 Mr. Paulsen (for himself, Mr. McDermott, Mr. Boustany, and Mr. Lewis of Georgia) introduced the following bill; which was referred to the Committee on Ways and Means A BILL To amend the Internal Revenue Code of 1986 to provide an increased penalty in certain cases of fraudulent understatement of a taxpayer’s liability by a tax return preparer.

1.

Short title

This Act may be cited as the Fighting Tax Fraud Act of 2012.

2.

Increased penalty for certain fraudulent understatements of taxpayer’s liability by tax return preparer

(a)

In general

Section 6694 of the Internal Revenue Code of 1986 is amended by redesignating subsections (c), (d), (e), and (f) as subsections (d), (e), (f), and (g), respectively, and by inserting after subsection (b) the following new subsection: (c)

Understatement due to fraud

(1)

In general

Any tax return preparer who prepares any return or claim for refund with respect to which any part of an understatement of liability is due to conduct described in paragraph (2) shall pay (in addition to any other penalties) a penalty with respect to each such return or claim in an amount equal to the greater of— (A)$5,000, or (B)the amount of such understatement of liability. (2)

Fraudulent conduct

Conduct is described in this paragraph if such conduct consists of— (A)a willful modification of any return or claim for refund which— (i)creates an understatement of liability, and (ii)is made by the tax return preparer after such return or claim has been signed by the taxpayer, and (B)a willful attempt by the tax return preparer to receive the proceeds of a refund any portion of which is attributable to such understatement of liability. . (b)

Conforming amendments

Subsections (d) and (e) of section 6694 of such Code, as redesignated by subsection (a), are each amended by striking subsection (a) or (b) each place it appears and inserting subsection (a), (b), or (c). (c)

Effective date

The amendments made by this section shall apply to returns and claims prepared after the date of the enactment of this Act.