Relates to the definition of tax return preparer; enrolled agents.
BILL NUMBER: S5710A
TITLE OF BILL : An act to amend the tax law, in relation to the definition of a tax return preparer
PURPOSE OR GENERAL IDEA OF BILL : This bill will make a technical correction in the definition of "tax return preparer" in new Tax Law section 32 subdivision 1 paragraph 14, as enacted by Chapter 159 of 2009 (Budget Bill A.159-B/S.59-B).
SUMMARY OF SPECIFIC PROVISIONS : This bill would amend paragraph 14 of subdivision 1 of Tax Law section 32 to exclude attorneys, public accountants, and certified public accountants and firms thereof from the definition of "tax return preparer" for purposes of registration of tax preparers under section 32.
JUSTIFICATION : The definition of "tax return preparer" in Tax Law section 32 inadvertently results in an inconsistency between Tax Law section 32 and Education Law section 7406-a, with respect to registration of out-of-state CPAs who prepare New York tax returns. Education Law section 7406-a authorizes out-of-state CPAs to perform tax services (a non-attest service) in New York. An out-of-state CPA who performs non-attest services in New York (i.e. preparing a New York tax return in person, by mail, telephone or other electronic means) I automatically consents to the jurisdiction, rules and disciplinary authority of the Board of Regents, and to the regulations of the Commissioner of Education.
The memorandum of support for Budget Bill A.159-B/S.59-B (Chapter 159 of 2009) asserts that the tax preparer registration provisions in Tax Law section 32 "represent a first effort to establish communication between tax preparers and DTP, thereby setting the stage for future cooperative development of standards to enhance the quality of tax preparation services in New York State." While this justification is applicable to non-licensed tax preparers, it fails to recognize that CPAs licensed in the united States must comply with professional standards for tax preparation; are educated in taxation and examined in taxation under the Uniform CPA examination (one of the four sections of the CPA exam is exclusively in taxation) i and that the CPA profession has maintained long-standing communication with Department of Taxation and Finance.
PRIOR LEGISLATIVE HISTORY : This is a new bill.
FISCAL IMPLICATIONS : None.
EFFECTIVE DATE : This act shall take effect immediately.
STATE OF NEW YORK ________________________________________________________________________ 5710--A 2009-2010 Regular Sessions IN SENATE May 29, 2009 ___________Introduced by Sens. KRUGER, C. JOHNSON, LANZA, STEWART-COUSINS -- read twice and ordered printed, and when printed to be committed to the Committee on Finance -- recommitted to the Committee on Finance in accordance with Senate Rule 6, sec. 8 -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said commit- tee AN ACT to amend the tax law, in relation to the definition of a tax return preparer THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Paragraph 14 of subdivision (a) of section 32 of the tax law, as amended by section 1 of part F of chapter 503 of the laws of 2009, is amended to read as follows: (14) "Tax return preparer" means an individual who prepares a substan- tial portion of any return for compensation.
[Enrolled agents or employ- ees]EMPLOYEES of a tax return preparer or a commercial tax return prep- aration 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 prepara- tion 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. S 2. This act shall take effect immediately.EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD14036-02-0