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State Board Report

January 2014

Unlicensed paid tax return preparers in New York State now need to be registered prior to filing any tax returns in calendar year 2014 to avoid penalties. This does not include CPAs, enrolled agents, attorneys, employees of CPA or law firms who prepare tax returns under the direct supervision of a CPA or lawyer of that firm, employees of a business who prepare that business’s return, clerical employees or volunteer tax preparers. Anyone else who was paid to prepare 10 or more New York State tax returns or reports in the last calendar year and who will be paid to prepare at least one NYS return in 2014, or who prepared fewer than 10 last year but expect to prepare 10 or more this year needs to register. California, Oregon and Maryland also register preparers.

New York State’s rules for tax preparers became effective December 11, 2013. The program falls within the New York Department of Taxation and Finance. It calls for annual registration of $100. ( For details see “20 NYCRR Part 2600 Tax Return Preparer Requirements“) Once someone registers they can print out a certificate and must provide their NYTPRIN and signature as requested on tax returns and reports. The department is going to identify accredited CPE courses, providers and/or software or other media acceptable for satisfying the four hours of CPE coursework to be completed each year by tax preparers with three or more years’ experience and for the 16 hours required for those with less experience. Looking ahead, the regulations state that to register with New York State a commercial tax return preparer will also need to pass the IRS tax return preparer’s competency examination should one be required for federal tax purposes and a New York State competency examination “the third calendar year following the date on which an exam has been made available by the department.”

Immediately after his swearing in as Internal Revenue Service Commissioner on January 6, 2014, John Koskinen was asked by reporters about the IRS’s attempt to require testing and continuing professional education for unlicensed tax preparers (see SBR 6/13). He suggested that if an educational training program could not be required, then perhaps the IRS could offer a certificate that would tell the public the individual has completed the IRS preparer course. He thought this voluntary approach could provide taxpayers with the knowledge that they are dealing with someone who has met minimum standards.

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