Initiated by Spano in 2003, the legislation was passed by the Board of Legislators Tuesday. It goes into effect in 60 days (Nov. 15).

            It does the following:

o       requires individuals engaged in the practice of income tax preparation to disclose their identity;

o       establishes and requires the distribution of a consumer bill of rights regarding tax preparers;

o       establishes notification requirements for the offering of refund anticipation loans;

o       creates a consumer alert registry to inform consumers about tax preparers who have engaged in unlawful practices.

 “This new law gives taxpayers important protections so they know who they are dealing with if they seek outside help in preparing their income taxes,” said Spano. “It protects people from fly-by-night preparers who prey on all segments of the population, particularly the elderly and uneducated. But even the more educated taxpayer can be misled by advertisements saying ‘instant tax refunds,’ not realizing that they are ending up with a interest-bearing loan.”

            He credited the Board of Legislators for acting on the legislation, particularly Martin Rogowsky, who chairs the Legislation Committee; Andrea Stewart-Cousins, the former chair of the Legislation Committee; and Jose Alvarado. 

Who Ya Gonna Call -- Tax Busters

The law will be enforced by the Department of Consumer Protection’s Weights and Measures Division, which will also establish and maintain a consumer-alert registry of tax preparers that have violated the law. The registry will be available to consumers upon request and posted on the department’s web page.

First-time offenders will be given a warning. Second-time offenders can be fined $500. After that, violators may be fined $1,000 for each offense.

What Preparers Are Covered

The law would apply to anyone who charges a fee to assist with the preparation of tax returns EXCEPT employees of a  business enterprise who are preparing returns for that business; lawyers who assist in the preparation of income tax returns in the practice of law; fiduciary employees who advise or assist in the preparation of income tax returns on behalf of the fiduciary estate; certified public accountants and public  accountant licensed by the state; an employee of a government unit who is assisting in the preparation of income tax returns in the performance of his or her official duties; and IRS agents.

Consumer Bill of Rights Regarding Tax Preparers

Every individual seeking help from a tax preparer in Westchester County shall be provided with a free informational flier, the “Consumer Bill of Rights Regarding Tax Preparers”  to be produced by the preparer and available in both English and Spanish. It will include the following notice:

·        You are entitled to ask the individual tax preparer assisting or advising you on your tax returns or related matters what his or her qualifications are and he or she is required, upon request, to produce documentation to verify such qualifications.

·        You are entitled to know how fees and charges are computed, including minimum charges and any additional charges. You must be given a receipt which states the charges for each tax return.  The receipt must list the address and phone number at which the tax preparer may be contacted during the year.

·        You are entitled to know whether the tax preparer will represent you at a government audit.  Failure to make this disclosure means that the tax preparer agrees to represent the tax payer or to provide representation.

·        You are entitled to receive all personal papers you provided to the tax preparer upon request when the original tax return is given to you for filing, unless the tax preparer is specifically permitted to retain such papers under state or federal law.

·        You are entitled to know that any tax preparer who advertises the availability of a program by

            which a taxpayer may receive a loan against the taxpayer’s anticipated refund may not directly or   indirectly represent such loan as a refund.  Any advertisement for tax preparation services which mentions such a loan program must state conspicuously that a fee or interest will be charged by the lending institution for any loan, and must disclose the name of the lending institution.

·        You are entitled to receive a copy of every tax return that the tax preparer prepares on your behalf at the time the original tax return is given to the taxpayer for filing.

·        You are entitled to have the tax preparer sign every tax return that he prepares on your behalf.

·        You are entitled to know whether or not the tax preparer is a licensed accountant or attorney in New York State.

·        As the taxpayer you should:

o       Never sign an incomplete tax return or one that is filled out in pencil.

o       Never send cash to the government for payment of your taxes.  Always use a check or money order to pay your taxes.

o       Never allow your refund to be mailed to the tax preparer.  Keep a record of your tax preparer’s year-round address and phone number.

o       Review your complete tax return for accuracy before it is mailed and keep a copy in your files.  Make a list of the originals you have given your tax preparer and have the tax preparer sign it.

o       Check with the Westchester County Department of Consumer Protection to determine if the individual or business preparing your taxes has ever been found to have violated the provisions of  Westchester County law related to the control and regulation of tax preparers.

o       Retain copies of your income tax return and supporting documentation for a period of three years.