IRS loses power to pursue innocent victims of tax preparer fraud indefinitely
S. 4964 — Protecting Innocent Taxpayers from Endless Assessments Act · Filed by Roger Marshall (R-KS) · 1 cosponsor · Introduced Jul 14, 2026 · Referred to committee
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What it does
This bill narrows the IRS's authority to assess back taxes beyond the normal 3-year statute of limitations. Currently, the IRS can assess taxes at any time if it suspects fraud; this bill would limit that extended authority only to cases where the taxpayer themselves (not a tax preparer or other third party) intentionally tried to evade taxes. Taxpayers victimized by dishonest tax preparers would get protection from indefinite IRS assessments.
Why we flagged it
The bill's operative mechanism is a narrow, protective amendment to tax-assessment authority. It clarifies that the fraud exception to the statute of limitations applies only when the taxpayer themselves intended evasion, not when a third party (preparer) committed fraud on the taxpayer's return.
What the text implies
- The bill's effect depends entirely on the current language of IRC 6501(c)(1), which is not quoted in the bill itself. The amendment inserts 'by the taxpayer' after 'intent,' but the full operative text of that section (including what 'intent' currently modifies) lives in the public statute and is not reproduced here. The practical scope of the protection cannot be fully assessed without reading th
- The bill applies only to assessments made or proceedings begun after enactment, creating a prospective-only rule. Taxpayers currently under indefinite assessment for preparer fraud would not benefit retroactively.
The full analysis lists 3 implications of this text.
Who it affects
Ordinary taxpayers who are victims of tax preparer fraud gain a statute-of-limitations protection they currently lack, preventing indefinite IRS assessments for conduct they did not authorize or intend. The bill does not shield actual tax evaders — only those defrauded by third parties.