2012 New York Consolidated Laws
TAX - Tax
Article 1 - (1 - 37) 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) If a tax  return  preparer  or  facilitator  is  required  to
  register or re-register with the department pursuant to paragraph one or
  three of subdivision (b) of this section, as applicable, and fails to do
  so  in  accordance  with  the terms of this section, then the tax return
  preparer of facilitator must pay a penalty of two hundred fifty dollars.
  Provided,  however,  that  if  the  tax  return  preparer or facilitator
  complies with the  registration  requirements  of  this  section  within
  ninety calendar days after notification of assessment of this penalty is
  sent  by  the  department,  then this penalty must be abated. If the tax
  return  preparer  or  facilitator  continues  to  fail  to  register  or
  re-register  after  the  ninety  calendar  day  period,  the  tax return
  preparer or facilitator must pay an additional penalty of  five  hundred
  dollars  if  the  failure  is  for  not  more  than  one  month, with an
  additional five hundred dollars for each additional  month  or  fraction
  thereof  during  which  the  failure continues. Once the ninety calendar
  days specified in this paragraph have expired, the penalty can be waived
  only for good cause shown by the tax return preparer or facilitator.
    (2) If a commercial tax return  preparer  fails  to  pay  the  fee  as
  required  in  paragraph  one  of  subdivision (c) of this section, for a
  calendar year, then the  commercial  tax  return  preparer  must  pay  a
  penalty  of  fifty  dollars  for  each  return the commercial tax return
  preparer has filed with the department in that calendar  year.  Provided
  however,  that  if  the commercial tax return preparer complies with the
  payment requirements  of  paragraph  one  of  subdivision  (c)  of  this
  section,   within   ninety  calendar  days  after  notification  of  the
  assessment of this penalty is sent by the department, then this  penalty
  must  be  abated.  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. Once  the  ninety  calendar  days
  specified in this paragraph have expired, 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.
    *NB There are 2 sb (g)'s
    *(g) 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.
    *NB There are 2 sb (g)'s