What’s in the Taxpayer Assistance and Service Act passed by the Senate

Keeping your PTIN active. Finding out why a client’s refund has stalled. These are everyday parts of running a tax practice, and proposed federal legislation could change how you handle them.

The Taxpayer Assistance and Service Act (TAS) would change IRS service and tax administration, including requirements for paid tax return preparers. The proposal reaches beyond IRS technology improvements to address preparer oversight and the procedures taxpayers use to resolve disputes.

As of Oct. 1, 2026, S. 5441, TAS Act, remains proposed legislation. However, the U.S. Senate passed the bipartisan legislation by unanimous consent on Sept. 30 as an amendment to H.R. 5349, moving a package of tax administration reforms closer to enactment. The legislation now heads to the U.S. House of Representatives for consideration. 

The TAS Act at a glance

Provision	Proposed change
PTIN eligibility	Education and suitability requirements for preparers who don’t qualify through specified designations or eligible state programs
Preparer penalties and EFINs	Higher penalties for certain violations and mandatory electronic filing identification number (EFIN) validation
Online client accounts	Broader access to authorized client records and the ability to respond to IRS notices online
E-filing and refund tracking	Expanded e-filing and processing, plus more detailed information about delays
Filing deadlines	Earlier deadlines for certain information returns and more time under the special estimated-tax rule for qualifying farmers and fishermen
Timely electronic submissions	Clearer protection when electronic documents or payments are authorized by the deadline but received shortly afterward
Refund claims	A general 12-month deadline for IRS determinations and additional appeal procedures
Tax debt and hardship	Changes to installment agreement fees, certain refund offsets and offers in compromise (OIC)
Taxpayer disputes	Expanded U.S. Tax Court jurisdiction and changes to procedures for challenging IRS decisions
Contractor withholding	Voluntary income tax withholding agreements between independent contractors and payers

Proposed education and suitability requirements for PTIN eligibility

The bill would make an education and suitability review a condition of PTIN eligibility for preparers who don’t qualify through another path. The suitability review would include a background check and a review of the preparer’s compliance with personal tax obligations.

Treasury would determine the required education covering ethics, professional responsibility and tax law, including recently enacted federal income tax legislation. However, the bill would prohibit requiring more than 18 hours annually under this provision.

Enrolled agents, CPAs, and attorneys meeting the bill’s good-standing and authorization requirements would qualify through their designations. Preparers holding valid licenses or registrations through qualifying state programs with comparable requirements could qualify through those programs.

The bill would prohibit a separate general exam as a prerequisite for PTIN assignment or renewal. Educational programs would still need a method to verify attendance and sufficient understanding of the material. Preparers who fail to complete required education would receive notice and a 30-day opportunity to correct the failure.

The IRS could also suspend or revoke a PTIN for specified conduct, including a repeated pattern of return errors affecting tax liability. The proposal includes notice, hearing and appeal protections, along with a separate preliminary suspension procedure for specified circumstances.

These amendments would take effect 180 days after enactment. An Annual Filing Season Program (AFSP) record of completion received by enactment would satisfy the education requirement for the calendar year to which that record applies; it wouldn’t create a permanent exemption.

Higher preparer penalties and mandatory EFIN validation

Several preparer penalties would increase, and filing software would have to validate an EFIN before transmitting covered documents once the required validation program is established. The proposal includes the following statutory base penalties. Inflation adjustments would apply where specified, so these shouldn’t be considered the final amounts for a particular future filing year.

Violation	Proposed base penalty
Failure to furnish a valid PTIN	$250 per failure, with a $75,000 annual cap
Failure to meet applicable EFIN requirements	$250 per affected e-filed document
Failure to meet preparer due diligence requirements	$1,000 per failure
Failure to meet specified return-copy, signature, recordkeeping or preparer information-reporting requirements	Generally $250 per failure, with annual caps of $50,000 or $75,000, depending on the violation
Misappropriation of a covered payment issued to a taxpayer, such as a refund	The greater of $1,000 or the full amount of the payment

The IRS would establish a real-time EFIN validation system that could identify numbers that are suspended, revoked, compromised or otherwise ineligible for use. Filing software would have to require successful validation before allowing covered electronic filings.

Expanded online access to clients’ IRS accounts for tax professionals

The bill would expand online access to covered IRS records and allow authorized professionals to submit responses to notices electronically. Eligible users would include representatives authorized to practice before Treasury, PTIN-holding preparers and qualified reporting agents.

The proposed account functionality would allow access to covered returns and correspondence, including documents sent to the taxpayer by the IRS. Taxpayers and their authorized professionals could upload responses rather than relying solely on other submission methods.

A provision particularly relevant to busy practices would allow professionals to access information for multiple authorized clients without entering each taxpayer’s account separately. The records-access requirement would cover the preceding six-year period, but it wouldn’t require access to years ending before enactment.

This account access shouldn’t be confused with a blanket expansion of representation rights; the provision addresses access to information and submission of responses, subject to taxpayer authorization.

Expanded e-filing, detailed refund tracking and callback wait times

The IRS would have to make e-filing and electronic processing available for federal returns and amended returns, with implementation phased in by return type. The bill would also generally require digitizing paper returns and correspondence using optical character recognition or similar technology, subject to specified exceptions. It wouldn’t eliminate paper filing.

Refund tracking would provide more useful details when processing stops. Required information would include the reason for the suspension and instructions on what the IRS needs, including the submission deadline. The requirement would cover original and amended returns.

The bill would require the IRS to publish a public dashboard showing estimated telephone wait times and whether callback service is available, with real-time updates where practical. The IRS also would have to post information about significant delays in processing returns and other submissions.

Separately, the bill states that, by 2028, the IRS should offer taxpayers a callback option on covered phone lines when their calls have not been answered within five minutes. This would allow callers to request a return call rather than remain on hold. The five-minute benchmark refers to when the IRS should offer a callback option, not how quickly it must return the call.

However, the callback provision is written as a “sense of Congress” statement, which expresses what Congress believes the IRS should do rather than creating a legally binding requirement. Unlike the reporting requirements, this language wouldn’t require the IRS to meet the callback goal even if the bill becomes law. It also wouldn’t guarantee that taxpayers reach an IRS employee within five minutes.

Note: Although the bill doesn’t name the Practitioner Priority Service (PPS) line, its definition of covered phone lines appears to include PPS because the service operates within IRS Accounts Management.

Changes to information return and estimated tax payments deadlines

Certain information returns would have an earlier e-filing deadline, while qualifying farmers and fishermen would receive more time under a specific estimated-tax exception. These are separate changes affecting different parts of the filing calendar.

Affected filing	Proposed change
Specified information returns	Jan. 31 e-filing deadline for covered returns, including reporting for miscellaneous income, interest, dividends, and payment-card or third-party network transactions. The bill also establishes a Jan. 31 deadline for IRA distribution reporting.
Qualifying farmers and fishermen	Move the filing-and-full-payment deadline used under the special estimated tax penalty exception from March 1 to April 15.

Clearer protections for timely e-filings and payments

The bill would extend a statutory timely-filing and timely-payment rule to qualifying electronic submissions authorized by the deadline. A permitted electronic document or payment could be treated as timely when the taxpayer authorizes submission by the applicable deadline and the IRS receives it no later than three business days afterward. For a payment, the IRS must both receive and account for it within that period.

This wouldn’t give taxpayers three extra business days to initiate a payment or filing. Authorization would still need to occur by the actual deadline. Arrangements designed principally to delay transferring funds to Treasury for economic benefit would be excluded.

A 12-month deadline for IRS refund claim decisions

The IRS would have 12 months after receiving a refund claim to make a determination, unless the taxpayer and IRS agree to another date. A disallowance would require a detailed written explanation and, when applicable, instructions for appealing.

For eligible claims, taxpayers could appeal a disallowance to the IRS Independent Office of Appeals within 30 days after the disallowance is mailed, or 90 days if mailed to an address outside the United States. The proposal excludes frivolous claims from these appeal provisions. When the IRS doesn’t make a determination within 12 months, a taxpayer could elect to treat the claim as disallowed for purposes of obtaining an administrative appeal.

Collection changes for clients who cannot pay

The proposal would change several collection procedures, including installment agreement fees and how certain refunds are treated. These provisions would apply to defined groups of taxpayers, not automatically to everyone experiencing financial difficulty.

Installment agreement fees: The bill would prohibit fees for qualifying taxpayers whose adjusted gross income (AGI) doesn’t exceed 250% of the applicable poverty level. The IRS also would have to identify likely hardship cases and inform affected taxpayers requesting installment agreements about other collection alternatives.

Refund offsets: A taxpayer classified as currently not collectible (CNC) before requesting the refund could receive an overpayment up to the amount of the earned income tax credit (EITC) allowed for that year, rather than having that amount applied to federal tax debt.

Offers in compromise: Required legal review would be limited to cases Treasury determines present a significant legal issue. Offers returned as nonprocessable would receive independent administrative review and an opportunity for appeal. The bill also would generally require returning covered federal income tax collections exceeding the remaining payment obligation under an accepted offer, subject to exceptions. Additionally, paid preparers of OICs would have to include a valid identifying number on the offer and required schedules or statements.

More options for challenging IRS decisions

The bill would expand Tax Court jurisdiction and revise several procedures affecting taxpayer disputes.

Refund suits in Tax Court: The Tax Court would gain authority to hear covered refund suits, generally subject to a $2 million limit per applicable tax year, period or category. For income taxes, the limit would apply to each tax year.

A higher small-dispute threshold: The threshold for covered small Tax Court disputes would increase from $50,000 to $100,000, with inflation adjustments.

Certain cases without full payment: Taxpayers current on applicable installment agreements, or whose covered liabilities are classified as CNC, could pursue specified liability or refund litigation without first paying the entire amount.

Relief for certain missed petition deadlines: Specified Tax Court petition deadlines would be subject to equitable tolling and other recognized exceptions. This could allow a late petition to proceed when the applicable legal standard is met. It wouldn’t create an automatic extension or make deadlines optional.

The bill also addresses multiyear bans on claiming the child tax credit (CTC), American opportunity tax credit (AOTC) and earned income tax credit (EITC). It would require clearer notices explaining covered denials and disallowance periods, and expressly authorize Tax Court review of those periods.

Voluntary income tax withholding for independent contractors

The bill would establish an explicit framework for income tax withholding on covered payments for services that are not otherwise wages. It wouldn’t impose mandatory withholding on all contractor payments.

Under a qualifying agreement, the payments would be treated as wages for the specified withholding provisions. This wouldn’t automatically reclassify the contractor as an employee for all tax or employment-law purposes.

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