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New York To Regulate Tax Preparers

New York To Regulate Tax Preparers 

As federal efforts to regulate independent tax preparers falter, the state of New York has become the fourth US state to implement regulation of unlicensed preparers. 

Nearly two-thirds of the tax preparation market is managed by licensed and unlicensed independent firms, with the third controlled by national firms such as H&R Block.  Overall, the industry serves some 80 million Americans and adds $9.4 billion to the economy.  

Earlier this year, the Internal Revenue Service proposed testing and continuing education requirements on an estimate 350,000 unlicensed preparers nationwide.  That effort stalled after a lawsuit was filed opposing the regulation, and the matter is still tied up in the courts. 

Meanwhile, interest in state regulation of the industry is growing.  New York will now join California, Oregon and Maryland in imposing regulations, requiring preparers to pass a competency test and take continuing education classes. 

Among the new rules, New York tax preparers cannot charge "an unconscionable fee" and must adhere to "best practices" according to the New York Department of Taxation and Finance web site.  The New York regulations became effective December 11, and carry possible criminal penalties. 

The New York rules may face a court challenge, as well, from the Institute for Justice, the group that sued over the IRS rules, said a lawyer with the group. 

 

Source:  Reuters News Service at http://www.reuters.com/article/2013/12/24/us-usa-tax-preparer-idUSBRE9BM0U920131224

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