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Assemblymember
Earlene Hooper
Assembly District 18
 
New Law Moves Toward Regulation of Tax Preparer Industry
Some preparers and refund anticipation loan facilitators must now register with NYS
November 19, 2009

Albany, NY – The New York State Department of Taxation and Finance announced it is implementing a new law aimed at curbing the unscrupulous behavior of some individuals and businesses that prepare tax returns, or facilitate refund anticipation loans offered to clients.

Individuals and businesses who meet certain criteria with regard to tax preparation and tax anticipation refund loans will have to register annually with the Tax Department and some commercial preparers will also be required to pay an annual $100 fee. Fines for violating these new amendments to the state Tax Law could reach $5,000.

Acting commissioner, Jamie Woodward, said, “Although most tax preparers are honest professionals, recent changes to the state Tax Law allow us to take steps to secure long-overdue regulation of unscrupulous individuals within the industry - many with absolutely no background or experience in taxation.

Anyone in New York, regardless of education, experience, training, or even criminal history, can call themselves a preparer and charge the public for the services they provide. Nearly 60 percent of New York personal income tax returns are prepared with the assistance of someone who is paid for the service. These preparers are uniquely situated to influence taxpayer behavior and become a powerful force behind taxpayers’ decisions to voluntarily comply with tax laws or, conversely, to commit tax fraud and other criminal acts.”

Current changes in the state Tax Law are the first step in developing minimum qualifications and standards for this industry.

“Just this past year, Governor Paterson and our Legislature directed the Tax Department to begin to register tax preparers who are not otherwise regulated as licensed accountants or attorneys. The legislation also directs the tax commissioner to chair a task force of government and industry representatives, including the IRS, and to make recommendations for minimum education and licensing standards for all tax preparers operating in New York. We are actively organizing this task force now; its findings and recommendations are due to our Legislature by 2012,” Woodward added.

Required to register are tax preparers who prepare a substantial portion of a tax return – personal or commercial – for a fee. Those who act as facilitators for making refund anticipation loans or refund anticipation checks must also register with the department.

Excluded from the process are volunteers, clerical workers, attorneys, CPAs and public accountants licensed by the state, and their employees who work on client tax returns.

To register, go online to www.nystax.gov, or call the Tax Department Call Center at 457-1929.

 
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