[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[S. 935 Introduced in Senate (IS)]
114th CONGRESS
1st Session
S. 935
To amend the Internal Revenue Code of 1986 and the Consumer Financial
Protection Act of 2010 to regulate tax return preparers and refund
anticipation payment arrangements, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
April 14, 2015
Mr. Booker introduced the following bill; which was read twice and
referred to the Committee on Finance
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 and the Consumer Financial
Protection Act of 2010 to regulate tax return preparers and refund
anticipation payment arrangements, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Tax Refund Protection Act of 2015''.
SEC. 2. REGULATION OF TAX RETURN PREPARERS.
(a) In General.--Subchapter A of chapter 80 of the Internal Revenue
Code of 1986 is amended by adding at the end the following new section:
``SEC. 7812. REGULATION OF TAX RETURN PREPARERS.
``(a) In General.--The Secretary shall--
``(1) establish a program to license or certify tax return
preparers subject to this section,
``(2) regulate such tax return preparers, and
``(3) before licensing or certifying a person as a tax
return preparer subject to this section, require that the
person demonstrate--
``(A) good character,
``(B) good reputation,
``(C) necessary qualifications to enable the person
to provide to taxpayers valuable service as a tax
return preparer, and
``(D) competency to perform the functions of a tax
return preparer.
``(b) Authority To Impose a Fee.--The Secretary shall require tax
return preparers subject to this section to pay a reasonable fee for
licensing or certification under this section.
``(c) Disclosure Requirements.--The Secretary shall, by rule,
require tax return preparers subject to this section to provide a
disclosure statement to taxpayers that shall contain statements--
``(1) identifying the amount of fees such tax return
preparer charges for preparing a Federal income tax return,
filing a Federal income tax return, or executing a refund
anticipation payment arrangement, and
``(2) identifying the average amount of time in which a
taxpayer who files a Federal income tax return electronically
can expect to receive a refund by mail, according to
information provided by the Internal Revenue Service.
``(d) Disciplinary Procedures.--After notice and opportunity for a
hearing, the Secretary may take any enforcement action against a tax
return preparer subject to this section who--
``(1) is incompetent,
``(2) is disreputable,
``(3) violates regulations prescribed under this section,
or
``(4) with intent to defraud, willfully and knowingly
misleads or threatens a taxpayer.
``(e) Tax Return Preparer Subject to Section.--A tax return
preparer is subject to this section if such preparer is not subject to
section 330 of title 31, United States Code.
``(f) Definitions.--For purposes of this section--
``(1) Tax return preparer.--See section 7701(a)(36) for the
definition of a tax return preparer.
``(2) Refund anticipation payment arrangement.--The term
`refund anticipation payment arrangement' has the meaning given
such term by section 1029B(d)(2) of the Consumer Financial
Protection Act of 2010.''.
(b) Clerical Amendment.--The table of sections for subchapter A of
chapter 80 of the Internal Revenue Code of 1986 is amended by inserting
after the item related to section 7811 the following new item:
``Sec. 7812. Regulation of tax return preparers.''.
(c) Effective Date.--The amendments made by this section shall
apply with respect to returns filed after December 31, 2015.
SEC. 3. REGULATION OF REFUND ANTICIPATION PAYMENT INSTRUMENTS.
(a) In General.--Subtitle B of the Consumer Financial Protection
Act of 2010 (12 U.S.C. 5511 et seq.) is amended by adding at the end
the following:
``SEC. 1029B. REGULATION OF REFUND ANTICIPATION PAYMENT ARRANGEMENTS.
``(a) In General.--The Bureau shall regulate refund anticipation
payment arrangements.
``(b) Disclosure Requirements.--The Bureau shall, by rule, require
tax return preparers to provide a disclosure statement to a consumer
that shall contain statements--
``(1) identifying the amount of fees for executing a refund
anticipation payment arrangement;
``(2) describing, in the case of a refund anticipation
payment arrangement involving a depository account not
controlled by the consumer, the difference in days between the
average amount of time by which a consumer receives the tax
refund (in whole or in part) from a refund anticipation payment
arrangement and the average amount of time by which a consumer
who files a Federal income tax return electronically receives
the tax refund deposited directly to that consumer's deposit
account by the taxing authority;
``(3) that a refund anticipation payment arrangement is not
necessary to receive a tax refund; and
``(4) that, if a consumer does not receive a tax refund or
the amount of the tax refund is less than the amount
anticipated under the refund anticipation payment arrangement,
the consumer may be responsible for paying any fees and
interest associated with a refund anticipation payment
arrangement.
``(c) Requirements Under TILA.--The Bureau shall promulgate
regulations that, to the extent practicable, require tax return
preparers that enter into a refund anticipation payment arrangement to
comply with section 128 of the Truth in Lending Act (15 U.S.C. 1638) to
the same extent as a creditor making a consumer credit transaction
other than under an open end credit plan.
``(d) Definitions.--In this section:
``(1) Refund anticipation payment arrangement.--The term
`refund anticipation payment arrangement' means an arrangement
under which, in exchange for Federal income tax preparation
services, a consumer agrees to pay a fee or interest upon
receipt of the consumer's tax refund to a tax return preparer,
lender, or other affiliated lender by--
``(A) requesting the Federal Government to deposit
such tax refund, in whole or in part, directly into a
depository account designated by either the consumer or
the tax return preparer, lender, or other affiliated
lender; or
``(B) directly paying the fee or interest to the
tax return preparer, lender, or other affiliated
lender.
``(2) Tax return preparer.--The term `tax return preparer'
means a tax return preparer (as defined in section 7701(a) of
the Internal Revenue Code of 1986) who is not subject to
regulation under section 330 of title 31, United States
Code.''.
(b) Technical and Conforming Amendment.--The table of contents of
the Dodd-Frank Wall Street Reform and Consumer Protection Act (12
U.S.C. 5301 et seq.) is amended by inserting after the item relating to
section 1029A the following:
``Sec. 1029B. Regulation of refund anticipation payment
arrangements.''.
(c) Exclusion for Certain Tax Preparers.--
(1) In general.--Section 1027(d) of the Consumer Financial
Protection Act of 2010 (12 U.S.C. 5517(d)) is amended by
striking paragraph (1) and inserting the following:
``(1) In general.--Except as permitted in paragraph (2),
the Bureau may not exercise any rulemaking, supervisory,
enforcement, or other authority over any person that is a
certified public accountant, permitted to practice as a
certified public accounting firm, or certified or licensed for
such purpose by a State, or any individual who is employed by
or holds an ownership interest with respect to a person
described in this subparagraph, when such person is performing
or offering to perform--
``(A) customary and usual accounting activities,
including the provision of accounting, tax (except as
related to tax return preparers pursuant to section
1029B), advisory, or other services that are subject to
the regulatory authority of a State board of
accountancy or a Federal authority; or
``(B) other services that are incidental to such
customary and usual accounting activities, to the
extent that such incidental services are not offered or
provided--
``(i) by the person separate and apart from
such customary and usual accounting activities;
or
``(ii) to consumers who are not receiving
such customary and usual accounting
activities.''.
(2) Conforming amendments.--Section 1027(d) of the Consumer
Financial Protection Act of 2010 (12 U.S.C. 5517(d)) is
amended--
(A) in the subsection heading, by striking ``and
Tax Preparers''; and
(B) in paragraph (2)--
(i) in subparagraph (A)--
(I) by striking ``paragraph (1)(A)
or (1)(B)'' and inserting ``that
paragraph''; and
(II) by striking ``paragraph
(1)(A)'' each place it appears and
inserting ``paragraph (1)'';
(ii) in subparagraph (C)--
(I) by striking ``For purposes of
subparagraphs (A) and (B), a person
described in paragraph (1)(A)'' and
inserting ``A person described in
paragraph (1)''; and
(II) by striking ``clause (i) or
(ii) of paragraph (1)(A)'' and
inserting ``subparagraph (A) or (B) of
paragraph (1)''; and
(iii) in subparagraph (D), by striking
``paragraph (1)(A) or (1)(B)'' and inserting
``that paragraph''.
SEC. 4. SPLIT REFUNDS MAY INCLUDE TAX RETURN PREPARER.
(a) In General.--Section 6402 of the Internal Revenue Code of 1986
is amended by adding at the end the following:
``(m) Split Refunds.--An income tax refund requested on a return of
Federal income tax prepared by an income tax preparer may be split
between the preparer and the taxpayer in accordance with the split
requested by the taxpayer on the return, except that the amount
designated for the preparer may not exceed the amount prescribed by the
Secretary by regulation or other guidance. A split of an individual
income tax return under this subsection shall not be treated as
disreputable conduct merely because the taxpayer requested such
split.''.
(b) Effective Date.--The amendment made by subsection (a) shall
apply with respect to returns for taxable years ending after the date
of the enactment of this Act.
SEC. 5. REGULATIONS.
Regulations issued under section 7812 of the Internal Revenue Code
of 1986, as added by section 2, and regulations issued under section
1029B of the Consumer Financial Protection Act of 2010, as added by
section 3, should be coordinated to the extent practicable.
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