Wednesday, September 25, 2013


Speaking of regulating tax professionals, the JOURNAL OF ACCOUNTANCY tells us that “New York State Proposes to Regulate Tax Return Preparers”.  According to the article -

“. . . the New York State Department of Taxation and Finance has proposed amendments to its Personal Income Tax Regulations and Procedural Regulations to regulate tax return preparers (N.Y. Comp. Codes R. & Regs, tit. 20, proposed Part 2600). Currently, Section 32 of the N.Y. Tax Law requires tax return preparers to register with the state. The proposed rules would add to the requirements contained in Section 32 by imposing minimum standards on who can become a tax return preparer, instituting a continuing education requirement, and requiring a competency exam.”

As mentioned above, un-initialed tax professionals, regardless of their state of residence or where their office is located, are currently required to register with the State of New York and pay a $100.00 fee if they want to prepare NY state income tax returns.  FYI, I add a $5.00 charge to the invoice of all 1040 clients for whom I prepare a NY resident or non-resident income tax return that is identified on the invoice as “NYS Tax Preparer Extortion Surcharge”.

The article further states that, under the current and proposed state law (highlight is mine) -

Attorneys, enrolled agents, public accountants, and CPAs, and their employees who prepare returns under their supervision, are not tax return preparers and therefore are not subject to these rules.”

Duh!  Enrolled Agents are certainly tax return preparers, and attorneys, public accountants, and CPAs, and “supervised” employees thereof, may very well be tax return preparers – but apparently not as the term “commercial tax return preparer” is defined in the law.  Since the only purpose of the current law is to extort money, since these professionals, except for EAs, already pay a license fee to New York, they were not included in the extortion scheme.  EAs were originally included, but the NY chapter of the NAEA fought and won exemption.

Obviously I believe that attorneys, CPAs, and “supervised employees” should not be exempt from any state licensing requirements.

Under the new proposal -

“. . . experienced preparers with three years or more experience preparing  New York State tax returns will be required to take four hours of accredited CPE annually, while less experienced preparers will have to complete 16 hours by the end of their first calendar year.”

And -

The proposed rules impose a requirement to pass competency exams . . . but limits the requirement to pass it to registrants in the third calendar year after the exam has been made available.”

Since I am already a victim of the current extortion scheme, I would not object to taking 4 hours per year of NYS CPE to keep up-to-date.  I am glad that NY limits the CPE requirement for “experienced” preparers.  However I have no intention of taking a test, and would hope that experienced preparers will be exempt from this test via “grandfathering”.  Anyway, I won’t have to worry about testing until at least 2017.

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