NY Tax L § 32 (2021)
2021 New York Laws TAX - Tax Article 1 - Short Title; Definitions; Miscellaneous 32 - Registration of Tax Return Preparers.

§  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.