LANSING, Mich. — The Michigan Senate last week approved legislation cosponsored by Sen. Ruth Johnson to protect taxpayers from fraudulent or incompetent tax return preparers and provide penalties for preparers who do not follow the law.
“It’s always been a passion of mine to fight fraud and fight for the vulnerable,” said Johnson, R-Holly. “This is a problem that way too many people are facing. Unfortunately, I had a personal experience with a tax preparer from another state who filed a fraudulent return in my name.”
Senate Bill 269, sponsored by Sen. Erica Geiss, D-Taylor, would create the Taxpayer Protection Act, which would ensure tax preparers are legitimate actors by requiring them to include their IRS Preparer Identification Number on state income tax returns or claims for refunds they submit on behalf of taxpayers. The number is a unique identifier that all paid preparers must already obtain and provide on federal tax returns.
“Dishonest tax preparers make big promises but then either don’t deliver on the promise, or worse, commit fraud with the victim’s personal information,” Johnson said. “This bipartisan legislation would protect Michigan taxpayers from being taken advantage of by unscrupulous or unqualified tax preparers.”
SB 269 includes some commonsense exemptions, such as exempting volunteers who prepare returns through a nonprofit organization or certified public accountants whose licensing standards already address required tax preparation criteria.
Several states, including Indiana and Illinois, have already taken similar action.
SB 269 has been sent to the House of Representatives for consideration.