State of NY proposes new law to regulate tax preparers

[jklcpa]

"Stepping into the void left when a federal court threw out the IRS’s registered tax return preparer program...."

http://www.journalofaccountancy.com/News/20138764.htm

[Guest Taxed]

It was just a matter of time before states started imposing their own rules. States will have a much easier time withstanding court challenges.

What this will do is drive away incompetent or preparers who refuse to follow the competency rules thereby reducing the # of paid preparers and it will drive up the cost of tax prep for the public.

The silver lining for competent, regulated tax pros is more income as a result of higher fees.

[SaraEA]

"Under the federal system that has been enjoined, enrolled agents were exempt from the registered return preparer requirements."

Does this mean that NY now wants EAs to register and pay? I thought we won that battle when the state started to require paid tax preparers to register and pay $100 fee. CPAs and attorneys were exempt from both requirements, and before the system went into place EAs were deemed exempt (thank you, NY chapter of NAEA). Registration applied to every one else who did more than 10 NY returns. What bothered me about the requirement was that it was a clear money-grabber because preparers got nothing in return. They had to pay to keep doing what they've always done, and the money went into the state's general fund to be used for new subway turnstiles or sidewalks in front of the new ballpark. (I can't bring myself to mention the team.) At least the IRS system that was declared out of the bounds of their authority to enact gave registered preparers a designation they could promote, likely would have weeded out many of those preparers who give us all a bad name, and would have enhanced the creditability of the profession by requiring continuing ed.

EAs are already regulated by the IRS (like CPAs and attorneys are by their respective boards), have to take continuing ed and have clean records. If NY decides they too must comply with the state regulations, what are they proposing to do that the IRS doesn't already do (except take more of our money)? In our office, which is not in NY but we do a considerable number of NY returns, we have several preparers who have more knowledge and experience than the CPAs and EAs among us (one actually taught NY state tax prep). Once the NY registration rules went into effect, all NY returns had to be routed to those with the designations, not that we could do a better job but because we weren't going to pay $100 for each of them for the "privilege" of filing NY returns. This is the same state that several times has postponed issuing refunds until after April 15 when the people who owed paid up so they had funds to pay the people who didn't. We already follow their mandate to efile, which carries a software cost. They're as arrogant as their team. Go Red Sox!!!

[Guest Taxed]

Unfortunately with state revenues in decline the politicians will try to raise user fees from fishing license to professional fees to make up the shortfall.

we just have to pass on these additional fees to our customers just like other businesses.

But as I said before the # of tax preparers will go down. Less competition from fly by night preparers.

[Lee B]

The state of Oregon has had Tax Preparer licensing since 1973. CPAs and Attorneys are excluded, but EAs are not.

Therefore, I am dual licensed in Oregon as an EA and a Licensed Tax Consultant for the last 20 years and I

have to meet CPE requirements for both licenses. California also licenses Tax Preparers,

but is less restrictive than Oregon.

[Guest Taxed]

What does Oregon charge you each year?

So far I am impacted by NY only. but I guess my luck will run out soon

[Lee B]

I pay $ 150 per year for a combined office/consultant license plus 30 hours of CPE annually.

I'm able to use the same CPE hours for both licenses.

[kcjenkins]

I expect the feds will get their act together and redo the law that was thrown out, don't you?

[jklcpa]

I expect the feds will get their act together and redo the law that was thrown out, don't you?

I think this also. I also think that the EAs should be included as exempt along with the CPAs and attorneys. They've passed an exam and are required to have CPE credits. Why would the EAs not be exempted? Seems like a money grab to me.

[Guest Taxed]

Given other pressing issues before Congress I don't expect any new movement on this front until 2014 elections are over. But I agree that this legislation will pass in some modified version. What I fear is the fees IRS will charge now??

[Mr. Pencil]

"Stepping into the void left when a federal court threw out the IRS’s registered tax return preparer program...."

U.S Court of Appeals for the District of Columbia will hear arguments tomorrow.

[HV Ken]

I got this from an EA colleague of mine, in regards to the NY law and EAs:

"This is the text of the law change. It refers to those required to be registered under Section 32. EAs are specifically excluded, unless they process RALs." http://www.tax.ny.gov/pdf/rulemaking/aug292013/taxpreparer/text.pdf

[kcjenkins]

U.S Court of Appeals for the District of Columbia will hear arguments tomorrow.

IRS Rides 1884 Dead Horse Law to Defense of Tax Preparer Rules

(Reuters) - The Obama administration on Tuesday defended its effort to regulate the tax return preparation business for the first time in U.S. history, basing its case largely on a 19th century law dealing with horses lost or killed in the Civil War.