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Bonamici, Booker Introduce Legislation to Protect Americans from Tax Refund Scams

September 27, 2021

WASHINGTON, DC [9/27/21] – Today Congresswoman Suzanne Bonamici (D-OR) and Senator Cory Booker (D-NJ) introduced bicameral legislation to protect consumers from tax refund scams by unscrupulous tax preparers.

The Tax Refund Protection Act would grant authority to the Department of the Treasury to establish the licensing, fees, and certification of tax return preparers to stop unethical practices. Millions of Americans rely on tax preparers, some of which engage in predatory practices to skim money off tax returns, overcharge through hidden fees, or redirect the entire refund into their own account.

"Many Americans rely on tax refunds to cover necessary expenses, and every penny makes a difference," said Congresswoman Suzanne Bonamici. "We must protect them and their tax refunds from predatory preparers who take advantage of the complexity of the tax code to line their own pockets. The Tax Refund Protection Act will provide increased transparency and needed oversight so taxpayers will not be cheated and can be confident that they will receive the amount they are due."

"Every year, far too many Americans, especially those who are low-income and underserved, file their taxes only to receive lower than expected returns due to unfair and undisclosed fees and rates," said Senator Booker. "This legislation will keep more hard-working taxpayers' money in their pockets by requiring greater transparency and accountability from tax preparers, helping to eliminate deceptive practices and protecting consumers each tax season."

The legislation will require tax preparers to provide a disclosure statement outlining the fees they will charge for preparing a tax return, direct taxpayers to where they can find when they can expect to receive their refunds, and disclose potential additional fees associated with a refund anticipation check. The bill also incorporates a recommendation from the National Taxpayer Advocate to help make sure there is accountability when tax preparers improperly use confidential taxpayer information.

A fact sheet about the Tax Refund Protection Act can be found here, and the text of the House bill can be found here. It is cosponsored by Representative Bennie Thompson (MS-02). The legislation is endorsed by Prosperity Now.

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