Malliotakis Bill to Protect Taxpayers from Ghost Preparers Advances from Ways & Means Committee

(WASHINGTON, DC) — Congresswoman Nicole Malliotakis today applauded the House Ways and Means Committee’s passage of her legislation, H.R. 9499, the Protecting Taxpayers from Ghost Preparers Act, which takes an important step to ensure that taxpayers who are victims of preparer fraud are not unfairly punished for actions they did not commit.



Under current law, when a dishonest tax preparer commits fraud without the taxpayer's knowledge, the taxpayer may be subject to an indefinite statute of limitations, even if they had no intent to evade their tax obligations. The bill addresses this gap in the law by clarifying that the unlimited statute of limitations for fraudulent tax returns applies only when the taxpayer intended to commit fraud—not when a dishonest tax preparer acted alone without the taxpayer's knowledge.

Several recent New York cases underscore how dishonest tax preparers can exploit taxpayers and defraud the system. An individual on Long Island pleaded guilty to a nearly $12 million tax fraud scheme. They prepared fraudulent tax returns, charged clients more than $1 million in fees—including a percentage of their refunds—and put those taxpayers at risk while enriching themselves. An individual in the Bronx was sentenced to four years in prison for orchestrating a decade-long, $145 million tax fraud scheme. He oversaw the filing of tens of thousands of false tax returns, generating approximately $12 million in fraudulent proceeds.

“My office has assisted over 1,400 constituent cases related just to IRS-related issues ranging from stolen checks in the mail to delayed tax refunds, and we’ve seen firsthand how frustrating and costly problems involving the IRS can be for hardworking taxpayers,” said Congresswoman Nicole Malliotakis. “Unfortunately, over the past several years, we have seen far too many cases of dishonest tax preparers exploiting hardworking Americans—especially seniors and other vulnerable taxpayers who are simply trying to pay their taxes. My legislation protects taxpayers from being unfairly punished for actions they did not commit and ensures that the IRS can focus on going after bad actors instead of good-standing taxpayers."

“Americans who are the victims of tax fraud – including fraud perpetrated in their name without their knowledge – deserve to know they will not be subject to unending scrutiny by the IRS,” said Ways and Means Committee Chairman Jason Smith (MO-08). “Unfortunately, current law suspends the statute of limitations for tax assessment when there is fraudulent intent – even when the intent is of someone other than the taxpayer. Representative Malliotakis’ Protecting Taxpayers from Ghost Preparers Act ensures the IRS is focused on pursuing those actually responsible for committing a crime, and I applaud her for being a tireless champion for fighting for people who are being taken advantage of.”

Watch Malliotakis' Remarks from the Ways & Means Committee Markup HERE.