The New York State Department of Taxation and Finance recently announced it has issued $3,790,400 in fines to noncompliant tax preparers.
Each year, tax return preparers must register with New York state before engaging in any tax return preparation services or filing tax returns with the department. Those who fail to comply with New York’s registration program may be subject to steep monetary penalties or other administrative action.
In all, 19 tax preparers were fined because they didn’t register with New York, pay the annual registration fee, sign tax returns they prepared, or file returns electronically.
“New York state has been a national leader in establishing high standards for tax return preparers,” Commissioner of Taxation and Finance Michael Schmidt said. “While most tax practitioners are responsible professionals, we’re committed to protecting taxpayers from those who are incompetent or unethical.”
Check Your Preparer’s Credentials
Over 15,000 tax return preparers have already completed the required education and annual registration application and paid any applicable registration fees. One can verify their preparer’s credentials by asking to see their registration certificate or proof that they don’t need to register. One can also verify a tax preparer is registered online.
The department said, “We closely monitor tax preparer activity throughout the year and expect them to adhere to our training requirements while operating in a professional manner.”
In addition to the requirements outlined above, tax preparers must also:
√ Include their federal preparer tax identification number (PTIN) or social security number on tax returns they prepare;
√ Include either their NYS registration number or exclusion code on the tax return;
√ Provide a completed copy of the return to the client;
√ Review and provide a copy of any disclosure agreements related to the client’s refund;
√ Ensure all information submitted is accurate and truthful; and
√ Meet continuing education requirements each year.
Penalties for Noncompliant Preparers
Example: If a tax preparer fails to register or pay the annual fee; submits 40 income tax returns without their signature or registration number; fails to electronically file returns; and fails to provide clients with a copy of their returns, the Tax Department could assess over $20,000 in fines.
If one suspects a tax preparer is engaging in illegal or improper conduct, they can file a complaint with the NYS Tax Department on its website, or by phone at 518-530-HELP. The Tax Department will review the complaint and, if appropriate, take corrective action that may include sanctions.
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