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

5/6/09 N.Y. St. Reg. TAF-07-09-00011-A

NEW YORK STATE REGISTER

VOLUME XXXI, ISSUE 18

May 06, 2009

RULE MAKING ACTIVITIES

DEPARTMENT OF TAXATION AND FINANCE

NOTICE OF ADOPTION

 

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

Filing No. 401

Filing Date. Apr. 21, 2009

Effective Date. May. 06, 2009

Consumer Bill of Rights Regarding Tax Preparers

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

Action taken:

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 final 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 and the Consumer Protection Board's internet websites, 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, refund, electronic filing, express mail, direct deposit, refund anticipation check, 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.

Final rule as compared with last published rule:

Nonsubstantive changes were made in section 2398.2(b).

Text of 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]

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

The changes to the last published rule merely track legislative changes made by Chapter 59 of the Laws of 2009, which was enacted April 7, 2009. The changes do not affect the statements contained in the Regulatory Impact Statement or the Statement in Lieu of a Regulatory Flexibility Analysis for Small Businesses and Local Governments, Rural Area Flexibility Analysis or Job Impact Statement.

Assessment of Public Comment

Written comments on proposal TAF-07-09-00011-P, adding a new Part 2398 - Consumer Bill of Rights Regarding Tax Preparers, were received from Senator John L. Sampson and Assemblyman Michael N. Gianaris as Co-Chairs of the Administrative Regulations Review Commission.

The comments indicate that, at the time of the writing, legislation was pending to amend General Business Law section 372. The legislation has since been enacted as Chapter 59 of the Laws of 2009. The writers advise the Department to incorporate the provisions of the amended section 372 into the rule and note that this would involve minor language adjustments such as adding a reference to the Consumer Protection Board website in section 2398.2(b) and including the term "refund anticipation check" in the list of terminology requiring explanation in section 2398.2(b)(2). It was also noted that the term "refund" appearing in the original statute was inadvertently omitted. The writers note that "[t]hese changes would ensure that the adopted rule tracks the statutory language as revised" and "would therefore not seem to rise to a substantive level, but could be included in a notice of adoption as nonsubstantial revisions."

The Department agrees with the comments and has made the suggested changes.