Panel unanimously backs measure to protect taxpayers from fraudulent "ghost" preparers

The Ways and Means Committee unanimously reported HR 9499, the Protecting Taxpayers from Ghost Preparers Act, which clarifies that the extended statute of limitations for fraudulent returns applies only when the taxpayer had the intent to evade tax, not when a paid preparer files fraud without the taxpayer’s knowledge.

Representative Malotakus, the bill’s sponsor, described multiple prosecutions and large schemes where dishonest preparers filed false returns and took illicit fees, leaving innocent taxpayers exposed to later IRS assessments. Tom Bartold of the Joint Committee on Taxation summarized the substitute: it applies preparer penalties to both valid and invalid filings prepared by paid preparers, narrows the cases in which the IRS can extend the fraud assessment period to situations where the taxpayer is alleged to have committed the fraud, and includes a technical correction to an earlier disaster‑related provision. JCT estimated the net revenue effects of components would be small (a ~$5 million increase from preparer-penalty clarity and approximately $2 million loss from limiting some extensions across the 2027–2036 window).

Committee action: After limited debate and the adoption of a substitute that addressed drafting concerns, the committee voted 40–0 to report HR 9499 as amended. Supporters emphasized shifting liability and enforcement focus onto paid preparers who commit fraud while protecting unwitting taxpayers from indefinite exposure.

Next steps: The bill is headed to the House floor with staff authorized to make technical changes and members given a short period to file supplemental views.