To amend the Internal Revenue Code of 1986 to modify the penalty on the understatement of taxpayer's liability by tax return preparers.
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Amends the Internal Revenue Code to modify the standards for imposing penalties on tax return preparers for understatements of tax to require: (1) substantial authority for a position with respect to an item on a tax return if such position was not disclosed with the return; and (2) a reasonable basis for a position which was disclosed with the return.
Requires tax return preparers to have a reasonable belief that a position with respect to a tax shelter or a reportable transaction (a transaction having a potential for tax avoidance or evasion) will more likely than not be sustained on its merits.
Referred to the House Committee on Ways and Means.
- Introduced in House Formatted Text PDF Formatted XML
Cite this page
U.S. Congress. (2026). H.R. 4318: To amend the Internal Revenue Code of 1986 to modify the penalty on the understatement of taxpayer's liability by tax return preparers.. 110th Congress. Open America. https://openamerica.io/bill/110-HR-4318/
"H.R. 4318: To amend the Internal Revenue Code of 1986 to modify the penalty on the understatement of taxpayer's liability by tax return preparers.." 110th Congress, 2026, Open America, https://openamerica.io/bill/110-HR-4318/.
H.R. 4318, 110th Cong. (2026), https://openamerica.io/bill/110-HR-4318/.
[H.R. 4318: To amend the Internal Revenue Code of 1986 to modify the penalty on the understatement of taxpayer's liability by tax return preparers.](https://openamerica.io/bill/110-HR-4318/)