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This entry was published on 2021-04-30
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SECTION 32
Registration of tax return preparers
Tax (TAX) CHAPTER 60, ARTICLE 1
§ 32. Registration of tax return preparers. (a) For purposes of this
section, the following terms have the specified meanings:

(1) "Attorney" means an attorney admitted to practice law in New York
state or one or more of the other states or jurisdictions of the United
States.

(2) "Certified public accountant" means an accountant licensed
pursuant to section seventy-four hundred four of the education law or a
similar law of one or more of the other states or jurisdictions of the
United States.

(3) "Commercial tax return preparer" means a tax return preparer who:

(A) prepared ten or more returns for compensation in the preceding
calendar year and will prepare at least one return for compensation
during the current calendar year; or (B) prepared fewer than ten returns
in the preceding calendar year but will prepare ten or more returns for
the current calendar year.

(4) "Commercial tax return preparation business" means an entity that
employs individuals who prepare tax returns and that meets the
thresholds described in paragraph three of this subdivision.

(5) "Creditor" means any person who makes a refund anticipation loan
or who takes an assignment of a refund anticipation loan.

(6) "Facilitator" means a person who individually or in conjunction or
cooperation with another person: (a) solicits the execution of,
processes, receives, or accepts an application or agreement for a refund
anticipation loan or refund anticipation check, (b) serves or collects
upon a refund anticipation loan or refund anticipation check; or (c) in
any other manner facilitates the making of a refund anticipation loan or
refund anticipation check. This term excludes any employees of a
facilitator who provide only clerical or other comparable support
services to such facilitator.

(7) "Electronic" means computer technology.

(8) "Enrolled agent" means an agent enrolled to practice before the
internal revenue service pursuant to section 10.4 of subpart A of part
ten of title thirty-one of the code of federal regulations.

(9) "Public accountant" means an accountant licensed pursuant to
section seventy-four hundred five of the education law or a similar law
of one or more of the other states or jurisdictions of the United
States.

(10) "Refund anticipation check" means a check, stored value card, or
other payment mechanism which: (a) represents the proceeds of a tax
refund; (b) was issued by a depository institution or other person that
received a direct deposit of the tax refund or tax credits; and (c) a
fee or other consideration is paid for such payment mechanism.

(11) "Refund anticipation loan" means a loan that is secured by or
that the creditor arranges to be repaid directly or indirectly from the
proceeds of an income tax refund or tax credits. A refund anticipation
loan also includes any sale, assignment, or purchase of tax refund at a
discount or for a fee, whether or not the amount is required to be
repaid to the buyer or assignee if the internal revenue service or the
department denies or reduces the amount of the tax refund.

(12) "Return" means a return or report relating to a tax administered
by the commissioner.

(13) "Tax" means any tax, fee, special assessment or other imposition
administered by the commissioner.

(14) "Tax return preparer" means an individual who prepares a
substantial portion of any return for compensation. Employees of a tax
return preparer or a commercial tax return preparation business who
prepare returns for clients of that preparer or preparation business, as
applicable, and partners who prepare returns for clients of a
partnership engaged in a commercial tax return preparation business, are
all "tax return preparers" for purposes of this section. Excluded from
the definition of "tax return preparer" are attorneys, public
accountants, enrolled agents, and certified public accountants, and
employees of an attorney, public accountant, enrolled agent, certified
public accountant, or firm thereof preparing returns under the
supervision of such attorneys, public accountants, certified public
accountants and enrolled agents or firms thereof. Also excluded are
volunteer tax preparers, employees of a business or partners in a
partnership whose job responsibilities include preparation of only the
business' or partnership's returns, and employees of a tax return
preparer or a commercial tax return preparation business who provides
only clerical or other comparable services.

(b)(1) Each tax return preparer, who will prepare at least one return
in a calendar year, and each facilitator, who will facilitate the making
of a refund anticipation loan or refund anticipation check, must
register electronically with the department for that calendar year, in
accordance with instructions prescribed by the commissioner.

(2)(A) Upon completion of the registration process, each tax return
preparer and facilitator will be issued a tax preparer or facilitator
registration certificate. If an individual acts as both a tax return
preparer and a facilitator, one registration certificate shall indicate
both activities.

(B) In accordance with instructions prescribed by the commissioner,
each tax return preparer and facilitator will also be assigned a unique
identification number by the department, which must be used by the tax
return preparer and facilitator on each return which the tax return
preparer is required to sign and each refund anticipation loan and
refund anticipation check the facilitator is required to sign.

(C) If a tax return preparer or facilitator is an employee or
prospective employee of a tax return preparer, a commercial tax return
preparation business, or a facilitator, the tax return preparer,
commercial tax return preparation business or facilitator must ensure
that the employee or prospective employee is properly registered with
the department and possesses a valid tax preparer or facilitator
registration certificate. If an individual acts as both a tax return
preparer and a facilitator one registration certificate shall indicate
both activities.

(3) Each registered tax return preparer and facilitator must
electronically re-register with the department annually, in accordance
with instructions prescribed by the commissioner. If, at any time during
the year following registration or re-registration, as applicable, any
information provided by the tax return preparer or facilitator upon
registration or re-registration is no longer correct, the tax return
preparer or facilitator must update his or her information in accordance
with instructions prescribed by the commissioner.

(4) Each tax return preparer preparing any return must sign the
document and include the unique identification number specified in
paragraph two of this subdivision, in accordance with instructions
prescribed by the commissioner.

(c)(1) Each commercial tax return preparer must electronically pay an
annual fee of one hundred dollars to the department, in accordance with
instructions prescribed by the commissioner. Registration of a
commercial tax return preparer is not complete until payment of the fee
is made.

(2) All fees received by the commissioner pursuant to this
subdivision, reduced by those amounts the commissioner determines are
necessary to cover administrative costs to administer the registration
program prescribed by this section and the costs of any reimbursements
to commercial tax return preparers that may be required due to
duplicative fee payments under this subdivision, must be deposited
monthly to the credit of the general fund of the state. The commissioner
will maintain a system of accounts showing the amount of money collected
and disbursed from the fee imposed by this subdivision.

(d) The issuance of a tax preparer or facilitator registration
certificate to provide tax preparation services or refund anticipation
loan services is not, and must not be advertised as, an endorsement by
the department of the tax return preparer or the facilitator, or his or
her qualifications or the services rendered by him or her.

(e) A tax return preparer who has not registered with the department,
or a commercial tax return preparer who has not paid the required
registration fee, will not be allowed to represent his or her clients
before the division of taxation or the division of tax appeals. This
sanction is in addition to any penalties which may be imposed pursuant
to subdivision (f) of this section.

(f) (1) A tax return preparer or facilitator shall not: (A) charge or
impose any fee, charge or other consideration in the making or
facilitating of a refund anticipation loan or refund anticipation check
apart from the fee charged by the creditor or bank that provided the
loan or check;

(B) Engage in unfair or deceptive acts or practices in the
facilitating of a refund anticipation check or a refund anticipation
loan, including making any oral statements contradicting any of the
information required to be disclosed under the Taxpayer Bill of Rights
as set forth in sections three hundred seventy-one through three hundred
seventy-three of the general business law;

(C) Directly or indirectly arrange for a third party to charge any
interest, fee or charge related to a refund anticipation loan or refund
anticipation check;

(D) Include any of the following provisions in any documents provided
or signed to obtain a refund anticipation loan or refund anticipation
check, including the loan application or agreement: (i) a hold harmless
clause; (ii) a confession of judgment clause; (iii) a waiver of the
right to a jury trial; (iv) any assignment of or order for payment of
wages or other compensation for services; (v) a waiver of any provision
of the Taxpayer Bill of Rights, as set forth in sections three hundred
seventy-one through three hundred seventy-three of the general business
law; or (vi) a waiver of the right to injunctive, declaratory, other
equitable relief, or relief on a classwide basis. Any aforementioned
waivers shall be deemed null, void and of no effect;

(E) Take or arrange for a creditor to take a security interest in any
property interest of the taxpayer other than the proceeds of the tax
refund to secure payment of a refund anticipation loan;

(F) Directly or indirectly, individually or in conjunction or
cooperation with another person, engage in the collection of an
outstanding or delinquent refund anticipation loan for any creditor or
assignee;

(G) Make a misrepresentation of fact in obtaining or attempting to
obtain a registration; or

(H) Engage in any other action prohibited by rules promulgated by the
commissioner.

(2) If a tax return preparer violates any one of the provisions
provided for in this subdivision, then the tax return preparer must pay
a penalty of five hundred dollars for each such violation, in addition
to any other penalties provided for in this section.

(g) (1) The department shall issue a notice to a tax return preparer
or facilitator for failure to register or re-register with the
department pursuant to paragraph one or three of subdivision (b) of this
section, which shall set forth a fifteen day period to cure the failure
to register or re-register. The commissioner is authorized to send such
notice electronically to the tax return preparer's or facilitator's
online services account. A tax return preparer or facilitator who fails
to register or re-register in accordance with such notice must pay a
penalty of two hundred fifty dollars. The penalty can be waived only for
good cause shown by the tax return preparer or facilitator.

(2) The department shall issue a notice to a commercial tax return
preparer who fails to pay the fee as required in paragraph one of
subdivision (c) of this section, for a calendar year, which shall set
forth a fifteen day period to cure the failure to pay the fee. The
commissioner is authorized to send such notice electronically to the
commercial tax return preparer's online services account. A commercial
tax return preparer who fails to pay the fee in accordance with such
notice must pay a penalty of fifty dollars for each return the
commercial tax return preparer has filed with the department in that
calendar year. The maximum penalty that may be imposed under this
paragraph on any commercial tax return preparer during any calendar year
must not exceed five thousand dollars. The penalty can be waived only
for good cause shown by the commercial tax return preparer.

(3) If a tax return preparer fails to sign his or her name to any
return that requires the tax return preparer's signature, or a
facilitator fails to sign his or her name to any refund anticipation
loan or refund anticipation check facilitation documentation, then the
tax return preparer or facilitator must pay a penalty in the amount of
two hundred fifty dollars for each failure to so sign. Provided,
however, that this penalty can be waived only for good cause shown by
the tax return preparer or facilitator.

The maximum penalty imposed under this paragraph on any tax return
preparer with respect to returns filed during any calendar year by the
tax return preparer, or on any facilitator with respect to any refund
anticipation loan or refund anticipation check facilitation
documentation completed during any calendar year by the facilitator must
not exceed ten thousand dollars. Provided, however, that if a tax return
preparer or facilitator has been penalized under this paragraph for a
preceding calendar year and again fails to sign his or her name on any
return that requires the tax return preparer's signature or again fails
to sign his or her name on any refund anticipation loan or refund
anticipation check facilitation documentation during a subsequent
calendar year, then the penalty under this paragraph for each failure
will be five hundred dollars, and no annual cap will apply.

(4) If a tax return preparer or a facilitator fails to include the
unique identification number assigned by the department pursuant to
subparagraph (B) of paragraph two of subdivision (b) of this section on
any return, or any return anticipation loan or return anticipation check
facilitation documentation that requires his or her signature, then the
tax return preparer or facilitator must pay a penalty of one hundred
dollars for each failure to include his or her unique identification
number. Provided, however, that this penalty can be waived only for good
cause shown by the tax return preparer or facilitator. The maximum
penalty imposed under this paragraph on any tax return preparer or
facilitator with respect to returns filed during any calendar year must
not exceed two thousand five hundred dollars; provided, however, that if
a tax return preparer or facilitator has been penalized under this
paragraph for a preceding calendar year and again fails to include the
unique identification number on one or more returns during a subsequent
calendar year, then the penalty under this paragraph for each failure
will be two hundred fifty dollars, and no annual cap will apply.

(5) If a tax return preparer, facilitator or a commercial tax return
preparation business employs an individual to prepare tax returns who is
not registered with the department and does not possess a valid tax
preparer or facilitator registration certificate, then the tax return
preparer, facilitator or commercial tax return preparation business, as
applicable, will be subject to a penalty of five hundred dollars per
occurrence. This penalty can be waived only for good cause shown.

(6) The penalties provided for by this subdivision must be paid upon
notice and demand and will be assessed, collected and paid in the same
manner as taxes under article twenty-seven of this chapter.

(h) (1) Tax return preparers and facilitators must prominently and
conspicuously display a copy of their registration certificate issued
pursuant to this section, for the current registration period, at their
place of business and at any other location where they provide tax
return preparation and/or facilitation services, in an area where
taxpayers using their services are able to see and review such
registration certificate.

(2) Tax return preparers and facilitators must prominently and
conspicuously display at their place of business and at any other
location where they provide tax return preparation and/or facilitation
services the following documents:

(A) a current price list, in at least fourteen-point type, that
includes, but is not limited to, a list of all services offered by the
tax return preparer and/or facilitator; the minimum fee charged for each
service, including the fee charged for each type of federal or New York
state tax return to be prepared and facilitation service to be provided;
and a list of each factor that may increase a stated fee and the
specific additional fees or range of possible additional fees when each
factor applies; and

(B) a copy of the most recent Consumer Bill of Rights Regarding Tax
Preparers published by the department pursuant to section three hundred
seventy-two of the general business law.

* (3) A tax return preparer or facilitator who fails to comply with
any of the requirements of this subdivision must pay a penalty of five
hundred dollars for the first month of non-compliance and five hundred
dollars for each subsequent month of non-compliance thereafter. The
maximum penalty that may be imposed under this subdivision on any tax
return preparer or facilitator during any calendar year must not exceed
ten thousand dollars. The penalty can be waived only for good cause
shown by the tax return preparer or facilitator.

* NB Effective January 1, 2022

(i) The provisions of this section will apply exclusively to the
registration of tax return preparers and facilitators with the
department, payment of the registration fee if required by commercial
tax return preparers, the signing of returns and use of the unique
identification numbers assigned by the department upon registration.
Other provisions of this chapter or any other provision of law
prescribing additional requirements applicable to tax return preparers
or facilitators will not be affected by the provisions of this section
except as set forth expressly herein, and will remain in full force and
effect.