Senator Charles J. Fuschillo, Jr. (8th Senate District), Chairman of the Senate’s Consumer Protection Committee, has introduced legislation creating a taxpayer bill of rights, which would guarantee new protections to individuals who utilize paid tax preparer services.
Under the guidelines of this legislation, tax preparers would be required to provide full disclosure about the terms and conditions of refund anticipation loans. Advertised as "instant refunds", these loans are actually high-cost bank loans secured by the taxpayer’s expected refund which last about 7-14 days until the actual IRS refund repays the loan. According to the National Consumer Law Center, refund anticipation loans cost from $30 to $115 in loan fees, and some preparers also charge an administrative fees, which range between $28 to $59.
"When consumers get a refund anticipation loan, they are actually borrowing against their own tax refund. Therefore, they need to be aware of the fees and potential risks associated with this type of loan before they sign anything," said Senator Fuschillo. "This legislation will ensure full disclosure of all applicable terms and fees associated with this type of loan, enabling residents to make an educated and informed choice."
In addition, paid tax preparers would be required to provide honest and accurate information about their qualifications and the services they may legally provide to their customers.
Paid tax preparers are unlicensed individuals and businesses which, for a fee, assist taxpayers in the preparation of their income tax returns. While the majority of these tax preparers are trained, experienced and conscientious professionals, some are not.
"Taxpayers deserve to know that they are entrusting their finances to someone who is a qualified and knowledgeable professional," Senator Fuschillo added. "This legislation would require tax preparers to disclose their qualifications, and would allow New Yorkers to make a decision based on clear facts."
With the exception of disclosure requirements for refund anticipation loans, this legislation would not apply to a corporation's own staff which prepares the corporation's taxes, attorneys, certified public accountants, government agencies, fiduciaries who assist in the preparation of taxes for a fiduciary estate, or agents enrolled to practice before the Internal Revenue Service.
IF YOU WOULD LIKE TO RECEIVE REGULAR UPDATES FROM SENATOR FUSCHILLO, PLEASE CLICK HERE.