§ 32 — Registration of tax return preparers

New York § 32

• Jurisdiction: New York
• Law TAX: Tax
• Art. 1: Short Title; Definitions; Miscellaneous

Text

§ 32. Registration of tax return preparers. (a) For purposes of this\nsection, the following terms have the specified meanings:\n (1) "Attorney" means an attorney admitted to practice law in New York\nstate or one or more of the other states or jurisdictions of the United\nStates.\n (2) "Certified public accountant" means an accountant licensed\npursuant to section seventy-four hundred four of the education law or a\nsimilar law of one or more of the other states or jurisdictions of the\nUnited States.\n (3) "Commercial tax return preparer" means a tax return preparer who:\n (A) prepared ten or more returns for compensation in the preceding\ncalendar year and will prepare at least one return for compensation\nduring the current calendar year; or (B) prepared fewer than ten returns\nin the preceding calendar year but will prepare ten or more returns for\nthe current calendar year.\n (4) "Commercial tax return preparation business" means an entity that\nemploys individuals who prepare tax returns and that meets the\nthresholds described in paragraph three of this subdivision.\n (5) "Creditor" means any person who makes a refund anticipation loan\nor who takes an assignment of a refund anticipation loan.\n (6) "Facilitator" means a person who individually or in conjunction or\ncooperation with another person: (a) solicits the execution of,\nprocesses, receives, or accepts an application or agreement for a refund\nanticipation loan or refund anticipation check, (b) serves or collects\nupon a refund anticipation loan or refund anticipation check; or (c) in\nany other manner facilitates the making of a refund anticipation loan or\nrefund anticipation check. This term excludes any employees of a\nfacilitator who provide only clerical or other comparable support\nservices to such facilitator.\n (7) "Electronic" means computer technology.\n (8) "Enrolled agent" means an agent enrolled to practice before the\ninternal revenue service pursuant to section 10.4 of subpart A of part\nten of title thirty-one of the code of federal regulations.\n (9) "Public accountant" means an accountant licensed pursuant to\nsection seventy-four hundred five of the education law or a similar law\nof one or more of the other states or jurisdictions of the United\nStates.\n (10) "Refund anticipation check" means a check, stored value card, or\nother payment mechanism which: (a) represents the proceeds of a tax\nrefund; (b) was issued by a depository institution or other person that\nreceived a direct deposit of the tax refund or tax credits; and (c) a\nfee or other consideration is paid for such payment mechanism.\n (11) "Refund anticipation loan" means a loan that is secured by or\nthat the creditor arranges to be repaid directly or indirectly from the\nproceeds of an income tax refund or tax credits. A refund anticipation\nloan also includes any sale, assignment, or purchase of tax refund at a\ndiscount or for a fee, whether or not the amount is required to be\nrepaid to the buyer or assignee if the internal revenue service or the\ndepartment denies or reduces the amount of the tax refund.\n (12) "Return" means a return or report relating to a tax administered\nby the commissioner.\n (13) "Tax" means any tax, fee, special assessment or other imposition\nadministered by the commissioner.\n (14) "Tax return preparer" means an individual who prepares a\nsubstantial portion of any return for compensation. Employees of a tax\nreturn preparer or a commercial tax return preparation business who\nprepare returns for clients of that preparer or preparation business, as\napplicable, and partners who prepare returns for clients of a\npartnership engaged in a commercial tax return preparation business, are\nall "tax return preparers" for purposes of this section. Excluded from\nthe definition of "tax return preparer" are attorneys, public\naccountants, enrolled agents, and certified public accountants, and\nemployees of an attorney, public accountant, enrolled agent, certified\npublic accountant, or firm thereof preparing returns under the\nsupervision of such attorneys, public accountants, certified public\naccountants and enrolled agents or firms thereof. Also excluded are\nvolunteer tax preparers, employees of a business or partners in a\npartnership whose job responsibilities include preparation of only the\nbusiness' or partnership's returns, and employees of a tax return\npreparer or a commercial tax return preparation business who provides\nonly clerical or other comparable services.\n (b)(1) Each tax return preparer, who will prepare at least one return\nin a calendar year, and each facilitator, who will facilitate the making\nof a refund anticipation loan or refund anticipation check, must\nregister electronically with the department for that calendar year, in\naccordance with instructions prescribed by the commissioner.\n (2)(A) Upon completion of the registration process, each tax return\npreparer and facilitator will be issued a tax preparer or facilitator\nregistration certificate. If an individual acts as both a tax return\npreparer and a facilitator, one registration certificate shall indicate\nboth activities.\n (B) In accordance with instructions prescribed by the commissioner,\neach tax return preparer and facilitator will also be assigned a unique\nidentification number by the department, which must be used by the tax\nreturn preparer and facilitator on each return which the tax return\npreparer is required to sign and each refund anticipation loan and\nrefund anticipation check the facilitator is required to sign.\n (C) If a tax return preparer or facilitator is an employee or\nprospective employee of a tax return preparer, a commercial tax return\npreparation business, or a facilitator, the tax return preparer,\ncommercial tax return preparation business or facilitator must ensure\nthat the employee or prospective employee is properly registered with\nthe department and possesses a valid tax preparer or facilitator\nregistration certificate. If an individual acts as both a tax return\npreparer and a facilitator one registration certificate shall indicate\nboth activities.\n (3) Each registered tax return preparer and facilitator must\nelectronically re-register with the department annually, in accordance\nwith instructions prescribed by the commissioner. If, at any time during\nthe year following registration or re-registration, as applicable, any\ninformation provided by the tax return preparer or facilitator upon\nregistration or re-registration is no longer correct, the tax return\npreparer or facilitator must update his or her information in accordance\nwith instructions prescribed by the commissioner.\n (4) Each tax return preparer preparing any return must sign the\ndocument and include the unique identification number specified in\nparagraph two of this subdivision, in accordance with instructions\nprescribed by the commissioner.\n (c)(1) Each commercial tax return preparer must electronically pay an\nannual fee of one hundred dollars to the department, in accordance with\ninstructions prescribed by the commissioner. Registration of a\ncommercial tax return preparer is not complete until payment of the fee\nis made.\n (2) All fees received by the commissioner pursuant to this\nsubdivision, reduced by those amounts the commissioner determines are\nnecessary to cover administrative costs to administer the registration\nprogram prescribed by this section and the costs of any reimbursements\nto commercial tax return preparers that may be required due to\nduplicative fee payments under this subdivision, must be deposited\nmonthly to the credit of the general fund of the state. The commissioner\nwill maintain a system of accounts showing the amount of money collected\nand disbursed from the fee imposed by this subdivision.\n (d) The issuance of a tax preparer or facilitator registration\ncertificate to provide tax preparation services or refund anticipation\nloan services is not, and must not be advertised as, an endorsement by\nthe department of the tax return preparer or the facilitator, or his or\nher qualifications or the services rendered by him or her.\n (e) A tax return preparer who has not registered with the department,\nor a commercial tax return preparer who has not paid the required\nregistration fee, will not be allowed to represent his or her clients\nbefore the division of taxation or the division of tax appeals. This\nsanction is in addition to any penalties which may be imposed pursuant\nto subdivision (f) of this section.\n (f) (1) A tax return preparer or facilitator shall not: (A) charge or\nimpose any fee, charge or other consideration in the making or\nfacilitating of a refund anticipation loan or refund anticipation check\napart from the fee charged by the creditor or bank that provided the\nloan or check;\n (B) Engage in unfair or deceptive acts or practices in the\nfacilitating of a refund anticipation check or a refund anticipation\nloan, including making any oral statements contradicting any of the\ninformation required to be disclosed under the Taxpayer Bill of Rights\nas set forth in sections three hundred seventy-one through three hundred\nseventy-three of the general business law;\n (C) Directly or indirectly arrange for a third party to charge any\ninterest, fee or charge related to a refund anticipation loan or refund\nanticipation check;\n (D) Include any of the following provisions in any documents provided\nor signed to obtain a refund anticipation loan or refund anticipation\ncheck, including the loan application or agreement: (i) a hold harmless\nclause; (ii) a confession of judgment clause; (iii) a waiver of the\nright to a jury trial; (iv) any assignment of or order for payment of\nwages or other compensation for services; (v) a waiver of any provision\nof the Taxpayer Bill of Rights, as set forth in sections three hundred\nseventy-one through three hundred seventy-three of the general business\nlaw; or (vi) a waiver of the right to injunctive, declaratory, other\nequitable relief, or relief on a classwide basis. Any aforementioned\nwaivers shall be deemed null, void and of no effect;\n (E) Take or arrange for a creditor to take a security interest in any\nproperty interest of the taxpayer other than the proceeds of the tax\nrefund to secure payment of a refund anticipation loan;\n (F) Directly or indirectly, individually or in conjunction or\ncooperation with another person, engage in the collection of an\noutstanding or delinquent refund anticipation loan for any creditor or\nassignee;\n (G) Make a misrepresentation of fact in obtaining or attempting to\nobtain a registration; or\n (H) Engage in any other action prohibited by rules promulgated by the\ncommissioner.\n (2) If a tax return preparer violates any one of the provisions\nprovided for in this subdivision, then the tax return preparer must pay\na penalty of five hundred dollars for each such violation, in addition\nto any other penalties provided for in this section.\n (g) (1) The department shall issue a notice to a tax return preparer\nor facilitator for failure to register or re-register with the\ndepartment pursuant to paragraph one or three of subdivision (b) of this\nsection, which shall set forth a fifteen day period to cure the failure\nto register or re-register. The commissioner is authorized to send such\nnotice electronically to the tax return preparer's or facilitator's\nonline services account. A tax return preparer or facilitator who fails\nto register or re-register in accordance with such notice must pay a\npenalty of two hundred fifty dollars. The penalty can be waived only for\ngood cause shown by the tax return preparer or facilitator.\n (2) The department shall issue a notice to a commercial tax return\npreparer who fails to pay the fee as required in paragraph one of\nsubdivision (c) of this section, for a calendar year, which shall set\nforth a fifteen day period to cure the failure to pay the fee. The\ncommissioner is authorized to send such notice electronically to the\ncommercial tax return preparer's online services account. A commercial\ntax return preparer who fails to pay the fee in accordance with such\nnotice must pay a penalty of fifty dollars for each return the\ncommercial tax return preparer has filed with the department in that\ncalendar year. The maximum penalty that may be imposed under this\nparagraph on any commercial tax return preparer during any calendar year\nmust not exceed five thousand dollars. The penalty can be waived only\nfor good cause shown by the commercial tax return preparer.\n (3) If a tax return preparer fails to sign his or her name to any\nreturn that requires the tax return preparer's signature, or a\nfacilitator fails to sign his or her name to any refund anticipation\nloan or refund anticipation check facilitation documentation, then the\ntax return preparer or facilitator must pay a penalty in the amount of\ntwo hundred fifty dollars for each failure to so sign. Provided,\nhowever, that this penalty can be waived only for good cause shown by\nthe tax return preparer or facilitator.\n The maximum penalty imposed under this paragraph on any tax return\npreparer with respect to returns filed during any calendar year by the\ntax return preparer, or on any facilitator with respect to any refund\nanticipation loan or refund anticipation check facilitation\ndocumentation completed during any calendar year by the facilitator must\nnot exceed ten thousand dollars. Provided, however, that if a tax return\npreparer or facilitator has been penalized under this paragraph for a\npreceding calendar year and again fails to sign his or her name on any\nreturn that requires the tax return preparer's signature or again fails\nto sign his or her name on any refund anticipation loan or refund\nanticipation check facilitation documentation during a subsequent\ncalendar year, then the penalty under this paragraph for each failure\nwill be five hundred dollars, and no annual cap will apply.\n (4) If a tax return preparer or a facilitator fails to include the\nunique identification number assigned by the department pursuant to\nsubparagraph (B) of paragraph two of subdivision (b) of this section on\nany return, or any return anticipation loan or return anticipation check\nfacilitation documentation that requires his or her signature, then the\ntax return preparer or facilitator must pay a penalty of one hundred\ndollars for each failure to include his or her unique identification\nnumber. Provided, however, that this penalty can be waived only for good\ncause shown by the tax return preparer or facilitator. The maximum\npenalty imposed under this paragraph on any tax return preparer or\nfacilitator with respect to returns filed during any calendar year must\nnot exceed two thousand five hundred dollars; provided, however, that if\na tax return preparer or facilitator has been penalized under this\nparagraph for a preceding calendar year and again fails to include the\nunique identification number on one or more returns during a subsequent\ncalendar year, then the penalty under this paragraph for each failure\nwill be two hundred fifty dollars, and no annual cap will apply.\n (5) If a tax return preparer, facilitator or a commercial tax return\npreparation business employs an individual to prepare tax returns who is\nnot registered with the department and does not possess a valid tax\npreparer or facilitator registration certificate, then the tax return\npreparer, facilitator or commercial tax return preparation business, as\napplicable, will be subject to a penalty of five hundred dollars per\noccurrence. This penalty can be waived only for good cause shown.\n (6) The penalties provided for by this subdivision must be paid upon\nnotice and demand and will be assessed, collected and paid in the same\nmanner as taxes under article twenty-seven of this chapter.\n (h) (1) Tax return preparers and facilitators must prominently and\nconspicuously display a copy of their registration certificate issued\npursuant to this section, for the current registration period, at their\nplace of business and at any other location where they provide tax\nreturn preparation and/or facilitation services, in an area where\ntaxpayers using their services are able to see and review such\nregistration certificate.\n (2) Tax return preparers and facilitators must prominently and\nconspicuously display at their place of business and at any other\nlocation where they provide tax return preparation and/or facilitation\nservices the following documents:\n (A) a current price list, in at least fourteen-point type, that\nincludes, but is not limited to, a list of all services offered by the\ntax return preparer and/or facilitator; the minimum fee charged for each\nservice, including the fee charged for each type of federal or New York\nstate tax return to be prepared and facilitation service to be provided;\nand a list of each factor that may increase a stated fee and the\nspecific additional fees or range of possible additional fees when each\nfactor applies; and\n (B) a copy of the most recent Consumer Bill of Rights Regarding Tax\nPreparers published by the department pursuant to section three hundred\nseventy-two of the general business law.\n (3) A tax return preparer or facilitator who fails to comply with any\nof the requirements of this subdivision must pay a penalty of five\nhundred dollars for the first month of non-compliance and five hundred\ndollars for each subsequent month of non-compliance thereafter. The\nmaximum penalty that may be imposed under this subdivision on any tax\nreturn preparer or facilitator during any calendar year must not exceed\nten thousand dollars. The penalty can be waived only for good cause\nshown by the tax return preparer or facilitator.\n (i) The provisions of this section will apply exclusively to the\nregistration of tax return preparers and facilitators with the\ndepartment, payment of the registration fee if required by commercial\ntax return preparers, the signing of returns and use of the unique\nidentification numbers assigned by the department upon registration.\nOther provisions of this chapter or any other provision of law\nprescribing additional requirements applicable to tax return preparers\nor facilitators will not be affected by the provisions of this section\nexcept as set forth expressly herein, and will remain in full force and\neffect.\n