TAF-07-09-00011-P Consumer Bill of Rights Regarding Tax Preparers

2/18/09 N.Y. St. Reg. TAF-07-09-00011-P

NEW YORK STATE REGISTER

VOLUME XXXI, ISSUE 7

February 18, 2009

RULE MAKING ACTIVITIES

DEPARTMENT OF TAXATION AND FINANCE

PROPOSED RULE MAKING

NO HEARING(S) SCHEDULED

 

I.D No. TAF-07-09-00011-P

Consumer Bill of Rights Regarding Tax Preparers

PURSUANT TO THE PROVISIONS OF THE State Administrative Procedure Act, NOTICE is hereby given of the following proposed rule:

Proposed Action:

Addition of Part 2398 to Title 20 NYCRR.

Statutory authority:

General Business Law, section 372

Subject:

Consumer Bill of Rights Regarding Tax Preparers.

Purpose:

To comply with statutory requirement to create and disseminate a Consumer Bill of Rights Regarding Tax Preparers.

Text of proposed rule:

Section 1. A new Part 2398 is added to read as follows:

PART 2398

CONSUMER BILL OF RIGHTS REGARDING TAX PREPARERS

(Statutory Authority: General Business Law, Section 372(b))

Section 2398.1 Definitions and Applicability.

(a) Definitions. (1) "Tax preparer" or "preparer" means a person, partnership, corporation, or other business entity that, in exchange for consideration, advises or assists or offers to advise or assist in the preparation of income tax returns for another.

(2) "Department" means the Department of Taxation and Finance.

(b) Applicability. The provisions of this Part do not apply to:

(1) An officer or employee of a corporation or business enterprise who, in his or her capacity as such, advises or assists in the preparation of income tax returns relating to such corporation or business enterprise;

(2) An attorney at law who advises or assists in the preparation of income tax returns in the practice of law, and the employees thereof;

(3) A fiduciary who advises or assists in the preparation of income tax returns on behalf of the fiduciary estate, testator, trustee, grantor, or beneficiaries thereof, and the employees thereof;

(4) A certified public accountant licensed pursuant to the Education Law or licensed by one or more of the states or jurisdictions of the United States, and the employees thereof;

(5) A public accountant licensed pursuant to the Education Law, and the employees thereof;

(6) An employee of a governmental unit, agency, or instrumentality who advises or assists in the preparation of income tax returns in the performance of his or her official duties;

(7) 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; or

(8) A tax preparer operating within New York City.

Section 2398.2 Consumer Bill of Rights.

(a) The Department shall produce and make available to taxpayers and tax preparers an informational publication regarding consumer's rights and laws concerning tax preparers, to be called a "Consumer Bill of Rights Regarding Tax Preparers" (hereinafter, "Consumer Bill of Rights"). This publication shall be easily reproducible by photocopy machines.

(b) The publication shall be available on the Department's internet website, and shall contain information including, but not limited to, the following:

(1) Postings required by state and federal laws, such as price posting and posting of qualifications;

(2) Explanations of some common services and terminology, such as preparation of short and long federal forms, electronic filing, express mail, direct deposit, refund anticipation loan, quick, instant, rapid, fast, fee, and interest;

(3) Basic information on what a tax preparer is and is not required to do for a consumer, such as the preparer's responsibility to sign a return, that a tax preparer may not be required to accompany a consumer to an audit but may have a voluntary policy to accompany consumers to audits;

(4) Information a tax preparer is legally required to provide to consumers;

(5) Practices in which a tax preparer is legally prohibited from engaging;

(6) Information regarding the requirements of section 372 of the General Business Law relating to refund anticipation loans;

(7) The telephone numbers of the Department for information and complaints;

(8) Any additional information the Department deems appropriate regarding consumers' rights and laws concerning tax preparers.

Section 2398.3 Dissemination.

(a) A copy of the Consumer Bill of Rights shall be provided to individuals or businesses upon request to the Department, and shall be sent by the Department no later than October fifteenth of each year to each tax preparer who, to the Department's knowledge, has been found to be in violation of section 372 of the General Business Law within the previous calendar year.

(b) Each tax preparer subject to this Part shall obtain a current Consumer Bill of Rights from the Department and shall reproduce it so that it is clear and legible. As of January first of each year, each tax preparer shall give to each customer, free of charge, a current, legible copy of the Consumer Bill of Rights prior to discussion with the customer. Each such tax preparer shall also verbally direct the consumer to review the Consumer Bill of Rights and shall answer any questions the consumer may have about its contents.

Text of proposed rule and any required statements and analyses may be obtained from:

John W. Bartlett, Tax Regulations Specialist 4, Department of Taxation and Finance, Taxpayer Guidance Division, Building 9, W. A. Harriman Campus, Albany, NY 12227, [phone], email: [e-mail]

Data, views or arguments may be submitted to:

Same as above.

Public comment will be received until:

45 days after publication of this notice.

Regulatory Impact Statement

1. Statutory authority: General Business Law, section 372, Subdivision (b). Section 372 of the General Business Law, added by Chapter 432 of the Laws of 2008, requires the Department of Taxation and Finance ("the Department") to produce and make available a Consumer Bill of Rights Regarding Tax Preparers, in accordance with regulations promulgated by the Commissioner.

2. Legislative objectives: This rule is being proposed pursuant to this authority to comply with the directive of section 372 of the General Business Law relating to the production and dissemination of a Consumer Bill of Rights Regarding Tax Preparers.

3. Needs and benefits: These amendments comply with the directive of section 372 of the General Business Law, which requires the Department to produce and make available an informational flier called a Consumer Bill of Rights Regarding Tax Preparers, in accordance with regulations promulgated by the Commissioner. This rule reflects the provisions of section 372 in requiring that the flier is to contain basic information including, but not limited to, postings required by state or federal law, definitions of common services and terminology, basic information regarding tax preparers' obligations to consumers, and contact information for the Department. The Department is required to make the publication available on its website and upon request, and to send a copy of the Consumer Bill of Rights Regarding Tax Preparers on or before October 15th of each year to any tax preparer who, to the Department's knowledge, has been found to be in violation of section 372 within the previous calendar year.

This rule parallels section 372 in defining certain terms and requiring tax preparers to provide a complimentary copy of the flier to each customer. In accordance with section 372, the rule also enumerates those entities to which these requirements do not apply.

4. Costs:

(a) Costs to regulated persons: It is estimated that there would be no costs to regulated parties associated with implementation of this rule. There will, however, be minimal costs to regulated parties attributable to the requirements imposed by section 372 of the General Business Law: tax preparers will be required to make copies of the Consumer Bill of Rights Regarding Tax Preparers and provide a copy to each customer.

(b) Costs to the agency and to the State and local governments including this agency: It is estimated that the implementation and continued administration of this rule will not impose any costs upon this agency, New York State, or its local governments.

(c) Information and methodology: This analysis is based on a review of the rule, which describes the information to be included in the Consumer Bill of Rights Regarding Tax Preparers, which is directed by statute, and on discussions among personnel from the Department's Taxpayer Guidance Division, Office of Counsel, Office of Tax Policy Analysis, and Office of Budget and Management Analysis.

5. Local government mandates: This rule imposes no mandates upon any county, city, town, village, school district, fire district, or other special district.

6. Paperwork: While this rule imposes no new reporting requirements, forms, or other paperwork upon regulated parties, section 372 of the General Business Law requires tax preparers to make copies of the Consumer Bill of Rights Regarding Tax Preparers and provide a copy to each customer.

7. Duplication: There are no relevant rules or other legal requirements of the Federal or State governments that duplicate, overlap, or conflict with this rule.

8. Alternatives: There were no significant alternatives to this proposal considered by this agency.

9. Federal standards: The rule does not exceed any minimum standards of the Federal government for the same or similar subject area.

10. Compliance schedule: The amendment will take effect when the Notice of Adoption is published in the State Register. No time is needed in order for regulated parties to comply with this rule, as no requirements are imposed on regulated parties.

Regulatory Flexibility Analysis, Rural Area Flexibility Analysis and Job Impact Statement

A Regulatory Flexibility Analysis for Small Businesses and Local Governments, Rural Area Flexibility Analysis, and Job Impact Statement are not being submitted with this rule because this rule will not impose any adverse economic impact on small businesses or local governments, or on public or private entities in rural areas, nor any additional reporting, recordkeeping, or other compliance requirements on these entities. Section 372 of the General Business Law, however, does impose minimal requirements on tax preparers that may be small businesses or located in rural areas, in that it requires tax preparers to make copies of the Consumer Bill of Rights Regarding Tax Preparers and provide a copy to each customer. It is evident from the subject matter of the rule that it will have no adverse impact on jobs and employment opportunities.

This rule merely complies with section 372 of the General Business Law, added by Chapter 432 of the Laws of 2008, which requires that the Department produce and disseminate a Consumer Bill of Rights Regarding Tax Preparers, pursuant to regulations promulgated by the Commissioner of Taxation and Finance. This rule adds a new Part 2398 to Chapter IX of the Procedural Regulations. The provisions of Part 2398 set forth information to be included in the Consumer Bill of Rights Regarding Tax Preparers, the manner in which it is to be disseminated, define certain terms, and establish to whom the provisions apply.