Bill Text: CT HB05610 | 2016 | General Assembly | Introduced
Bill Title: An Act Requiring The Licensing Of Commercial Tax Preparers And Facilitators.
Spectrum: Committee Bill
Status: (Introduced - Dead) 2016-04-21 - Referred by House to Committee on Appropriations [HB05610 Detail]
Download: Connecticut-2016-HB05610-Introduced.html
General Assembly |
Raised Bill No. 5610 | ||
February Session, 2016 |
LCO No. 2935 | ||
*02935_______GAE* | |||
Referred to Committee on GOVERNMENT ADMINISTRATION AND ELECTIONS |
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Introduced by: |
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(GAE) |
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AN ACT REQUIRING THE LICENSING OF TAX PREPARERS AND FACILITATORS.
Be it enacted by the Senate and House of Representatives in General Assembly convened:
Section 1. (NEW) (Effective October 1, 2016) As used in this section and sections 2 to 16, inclusive, of this act:
(1) "Attorney" means an attorney admitted to practice law in this state or one or more of the other states or jurisdictions of the United States.
(2) "Board" means the State Board of Tax Practitioners established in section 2 of this act.
(3) "Certified public accountant" means an accountant licensed pursuant to chapter 389 of the general statutes or a similar law of one or more of the other states or jurisdictions of the United States.
(4) "Client" means an individual for whom a tax preparer or facilitator performs or agrees to perform tax preparation services.
(5) "Commercial tax return preparer" means a tax preparer who: (A) Prepared ten or more returns for compensation in the preceding calendar year and will prepare at least one return for compensation during the current calendar year; or (B) prepared fewer than ten returns in the preceding calendar year but will prepare ten or more returns for the current calendar year.
(6) "Commercial tax return preparation business" means an entity that employs commercial tax return preparers.
(7) "Creditor" means any person who makes a refund anticipation loan or who takes an assignment of a refund anticipation loan.
(8) "Electronic" means computer technology.
(9) "Enrolled agent" means an agent enrolled to practice before the United States Internal Revenue Service pursuant to 31 CFR 10.4, subpart A.
(10) "Facilitator" means a person who individually or in conjunction or cooperation with another person: (A) Solicits the execution of, processes, receives or accepts an application or agreement for a refund anticipation loan or refund anticipation check; (B) serves or collects upon a refund anticipation loan or refund anticipation check; or (C) in any other manner, facilitates the making of a refund anticipation loan or refund anticipation check. "Facilitator" does not include any employees of a facilitator who provide only clerical or other comparable support services to such facilitator.
(11) "Tax preparer" means an individual who is licensed by the board to provide individual tax preparation services
(12) "In good standing" means an individual has not engaged in conduct that would justify censure, suspension or disbarment from practice.
(13) "Provide individual tax preparation services" means to prepare, advise or assist in the preparation of, or to assume final responsibility for, another person's preparation of a federal or state income tax return of another person for valuable consideration.
(14) "Refund anticipation check" means a check, stored value card or other payment mechanism that: (A) Represents the proceeds of a tax refund; (B) is issued by a depository institution or other person that received a direct deposit of the tax refund or tax credits; and (C) is paid for by a fee or other consideration.
(15) "Refund anticipation loan" means a loan that is secured by or that the creditor arranges to be repaid directly or indirectly from the proceeds of an income tax refund or tax credits. "Refund anticipation loan" also includes any sale, assignment or purchase of tax refund at a discount or for a fee, whether or not the amount is required to be repaid to the buyer or assignee if the United States Internal Revenue Service or the Department of Revenue Services denies or reduces the amount of the tax refund.
(16) "License" means, unless the context requires otherwise, an authorization issued by the board to provide individual tax preparation services.
(17) "Return" means a return or report relating to a tax administered by the United States Internal Revenue Service or Department of Revenue Services.
Sec. 2. (NEW) (Effective October 1, 2016) (a) There is established a State Board of Tax Practitioners, within the Office of the Secretary of the State, which shall consist of eight members, to be appointed by the Governor in consultation with the Secretary of the State. All members of the board shall be residents of this state. The Governor shall select a chairperson for the board. The term of each member of the board shall be coterminous with that of the Governor. Vacancies occurring during a term shall be filled by appointment by the Governor for the unexpired portion of the term. Upon the expiration of a member's term of office, such member shall continue to serve until a successor has been appointed. Any member of the board whose professional license is revoked or suspended shall automatically cease to be a member of the board. No person who has served two successive complete terms shall be eligible for reappointment to the board. An appointment to fill an unexpired term shall not be considered to be a complete term. Any member who, without just cause, fails to attend fifty per cent of all meetings held during any calendar year shall not be eligible for reappointment.
(b) The board consists of eight members of which seven have at least five years of tax preparation experience and one shall be a member of a nonprofit tax program or nonprofit consumer advocate program. The members of the board may also include, but need not be limited to, representatives of the following groups: (1) A member of a nonprofit tax program or nonprofit consumer advocate program; (2) a commercial individual tax preparer who has been in practice in the state for more than ten years and has at least two hundred employees; (3) a member of the Connecticut Association of Certified Public Accountants; (4) a member of the Connecticut Society of Public Accountants; (5) a member of the Connecticut Bar Association; and (6) a member of the National Association of Enrolled Agents.
(c) The board shall meet at such times and places as may be fixed by the board and shall meet at least once in every quarter of a calendar year. A majority of the board members then serving shall constitute a quorum at any meeting. The board shall have a seal which shall be judicially noticed. The board shall maintain a registry of the names and addresses of all registrants, and shall have responsibility for the administration and enforcement of the provisions of sections 3 to 16, inclusive, of this act.
(d) Each member of the board shall be reimbursed for his or her actual and necessary expenses incurred in the discharge of such member's official duties.
(e) The board shall annually publish a directory of registrants which shall include the names of all registrants, arranged alphabetically.
(f) The board may recommend and the Secretary of the State may employ, subject to the provisions of chapter 67 of the general statutes, such personnel as may be necessary to carry out the provisions of this section, section 1 of this act and sections 3 to 16, inclusive, of this act. The board may enter into such contractual agreements as may be necessary for the discharge of its duties, within the limit of its appropriated funds and in accordance with established procedures, as it deems necessary in its administration and enforcement of said sections. It may appoint committees or persons to advise or assist the board in such administration and enforcement as it may see fit.
(g) The board shall issue licenses to tax preparers and facilitators. The board may take any action that is necessary and proper to effectuate the purposes of this section, section 1 of this act and sections 3 to 16, inclusive of this act, including the power to issue subpoenas to compel the attendance of witnesses and the production of documents; to administer oaths; to take testimony and to receive evidence concerning all matters within its jurisdiction. In case of disobedience of a subpoena, the board may invoke the aid of any court of this state in requiring the attendance and testimony of witnesses and the production of documentary evidence. The board, its members, and its agents shall be immune from personal liability for actions taken in good faith in the discharge of the board's responsibilities, and the state shall indemnify and hold harmless the board, its members, and its agents from all costs, damages and attorneys' fees arising from claims and suits against them with respect to matters to which such immunity applies.
Sec. 3. (NEW) (Effective October 1, 2016) (a) The State Board of Tax Practitioners shall have the following powers and all associated powers necessary or proper to carry the granted powers into effect:
(1) To determine qualifications of applicants for licensing as a facilitator or a tax preparer in this state;
(2) To cause examinations to be prepared, conducted and graded;
(3) To issue licenses to qualified applicants upon their compliance with the rules of the board;
(4) To restore the license of any facilitator or tax preparer whose license has been suspended or revoked, including: (A) At a time certain; or (B) when the person subject to suspension fulfills any conditions for reissuance set by the board;
(5) To investigate alleged violations of this section and sections 4 to 16, inclusive, of this act or any regulation or order adopted thereunder;
(6) To enforce the provisions of this section and sections 4 to 16, inclusive, of this act and to exercise general supervision over facilitator and tax preparer practice;
(7) To issue a cease and desist order in accordance with section 15 of this act;
(8) To assess civil penalties within a cease and desist order issued by the board if the board has reason to believe that a person has been engaged or is engaging in any violation of this section or sections 4 to 16, inclusive, of this act or any regulation or order adopted thereunder;
(9) To formulate a code of professional conduct for facilitators and tax preparers;
(10) To assess against the licensee or any other person found guilty of violating any of the provisions of this section or sections 4 to 16, inclusive, of this act or any regulation or order adopted thereunder, in addition to any other sanctions, the costs associated with the disciplinary or other action taken by the board;
(11) To order that any person who has engaged in or is engaging in any violation of this section or sections 4 to 16, inclusive, of this act or any regulation or order adopted thereunder, to rescind and pay restitution to anyone harmed by the violation who seeks rescission; and
(12) To adopt regulations, in accordance with the provisions of chapter 54 of the general statutes, to implement the provisions of this section, section 2 and sections 4 to 16, inclusive, of this act.
(b) The power of the board to restore a license under subdivision (4) of subsection (a) of this section includes the power to restore a license suspended or revoked due to conviction of a crime. In making a determination to restore a license, the board shall consider the relationship of the facts that supported the conviction to the code of professional conduct, if any, and all intervening circumstances in determining the fitness of the person to receive or hold a facilitator's or tax preparer's license.
(c) The board may keep personal financial information gathered pursuant to an investigation by the board confidential after a final order or determination by the board, unless disclosure is considered necessary by the board for the investigation or prosecution of an alleged violation of this section, section 2 and sections 4 to 16, inclusive, of this act, or any regulation or order adopted thereunder. For the purposes of this subsection, "personal financial information" includes, but is not limited to, tax returns.
Sec. 4. (NEW) (Effective October 1, 2016) (a) Except as provided in section 13 of this act, no person shall engage in the business of, solicit business as or make representations to be or advertise as furnishing tax preparation services without obtaining a tax preparer or facilitator license from the board. Every applicant for a license as a facilitator or tax preparer shall satisfy the following requirements in order to qualify for a license:
(1) Be eighteen years of age or older;
(2) Possess a high school diploma or have passed an equivalency examination;
(3) Present evidence satisfactory to the State Board of Tax Practitioners that the applicant has successfully completed at least seventy hours in basic personal income tax law, theory and practice at a professional training session or educational institution approved by the board; and
(4) Possess a preparer tax identification number issued by the United States Internal Revenue Service.
(b) In addition to the requirements of subsection (a) of this section, every applicant for licensing as a tax preparer or facilitator shall pass an examination to the satisfaction of the board. The examination shall be prepared in a manner that, in the judgment of the board, measures the applicant's knowledge of Connecticut and federal personal income tax law, theory and practice. In order to obtain a facilitator's license, the examination shall be of a more exacting nature and require higher standards of knowledge of Connecticut and federal personal income tax law, theory and practice than the examination for a tax preparer's license.
(c) In addition to the requirements of subsections (a) and (b) of this section, every applicant for licensing as a facilitator or tax preparer shall present evidence satisfactory to the board of active employment, as a tax preparer or facilitator or employment in this or another state in a capacity that is, in the judgment of the board, equivalent to that of a tax preparer or facilitator, for not less than a cumulative total of one thousand one hundred hours during at least two of the last five years. The board may accept evidence that the applicant was employed as a tax preparer under supervision for the period indicated in a certificate issued by another state to be satisfactory evidence of the applicant's employment as a tax preparer for the period indicated. If an applicant has worked less than a cumulative total of one thousand one hundred hours in at least two of the last five years, the board may consider the number of hours employed, the number of years employed, the number of tax returns prepared and whether the work involved contributed directly to the professional competence of the individual in determining if a tax preparer or facilitator has met the work experience requirement.
(d) If, in the judgment of the board, an applicant has, in combination, the education and experience to qualify for a facilitator's or tax preparer's license, but does not meet or cannot present evidence of strict compliance with the requirements of subdivision (3) of subsection (a) of this section or subsection (c) of this section, the board may allow some of the applicant's education or experience to substitute one for the other. The provisions of this subsection shall not be construed to allow a waiver of, or substitution for, any qualifications needed for a facilitator's or tax preparer's license.
(e) The initial application fee for a tax preparer's or facilitator's license shall be paid by a means to be determined by the board in the amount of fifty dollars. Each such license shall be renewable annually.
Sec. 5. (NEW) (Effective October 1, 2016) The State Board of Tax Practitioners may issue a license to an applicant for a license as a facilitator or as a tax preparer who: (1) Presents evidence satisfactory to the board that the applicant is licensed as a tax preparer or facilitator in a state that has requirements for licensing substantially similar to the requirements for licensing in this state; and (2) has passed to the satisfaction of the board an examination covering Connecticut personal income tax law, theory and practice.
Sec. 6. (NEW) (Effective October 1, 2016) (a) Each tax preparer, who will prepare at least one return in a calendar year, and each facilitator, who will facilitate the making of a refund anticipation loan or refund anticipation check, shall apply electronically for a license for that calendar year, in accordance with instructions prescribed by the board.
(b) Upon completion of the licensing process, set forth in section 4 of this act, each qualified tax preparer and facilitator shall be issued a tax preparer or facilitator license. If an individual acts as both a tax preparer and a facilitator, one license shall indicate both activities.
(c) In accordance with instructions prescribed by the board, each tax preparer and facilitator shall also be assigned a unique identification number, that shall be used by the tax preparer and facilitator on each return that the tax preparer is required to sign and each refund anticipation loan and refund anticipation check the facilitator is required to sign.
(d) If a tax preparer or facilitator is an employee or prospective employee of a tax preparer, a commercial tax return preparation business, or a facilitator, the tax preparer, commercial tax return preparation business or facilitator shall ensure that the employee or prospective employee is properly licensed with the board and possesses a valid tax preparer or facilitator license.
(e) Each licensed tax preparer and facilitator shall electronically renew his or her license with the board annually, in accordance with instructions prescribed by the board. If, at any time during the year following licensing or renewal, as applicable, any information provided by the tax preparer or facilitator upon licensing or renewal is no longer correct, the tax preparer or facilitator shall update his or her information in accordance with instructions prescribed by the State Board of Tax Practitioners.
(f) Each tax preparer preparing any return shall sign the document and include the unique identification number referenced in subsection (c) of this section, in accordance with instructions prescribed by the State Board of Tax Practitioners.
(g) Each commercial tax return preparer shall pay an annual fee of one hundred dollars to the board, in accordance with instructions prescribed by the board, to obtain a license as a commercial tax return preparer.
(h) The issuance of a tax preparer or facilitator license to provide tax preparation services or refund anticipation loan services is not, and shall not be advertised as, an endorsement by the board, or his or her qualifications or the services rendered by him or her.
(i) A tax preparer who has not applied for a license with the board, or a commercial tax return preparer that has not paid the required licensing fee, shall not represent his or her clients before the Department of Revenue Services.
(j) If a tax preparer or facilitator is required to apply for a license or license renewal with the board pursuant to this section and fails to comply with the requirements of this section, the tax preparer or facilitator shall pay a penalty of twenty-five dollars for each month without a license for a maximum of three hundred dollars per calendar year. The board may waive such penalty only for good cause shown by the tax preparer or facilitator.
(k) If a commercial tax return preparer fails to pay the annual licensing fee as required in subsection (g) of this section, for a calendar year, the commercial tax return preparer shall pay a penalty of twenty-five dollars for each month without a license for a maximum of three hundred dollars per calendar year.
Sec. 7. (NEW) (Effective October 1, 2016) The State Board of Tax Practitioners shall adopt regulations, in accordance with the provisions of chapter 54 of the general statutes, to establish reasonable fees for:
(1) Application for examination for a facilitator's license.
(2) Application for examination for a tax preparer's license.
(3) Issuance or renewal of a facilitator's license.
(4) Issuance or renewal of a tax preparer's license.
(5) Issuance or renewal of a facilitator's inactive license.
(6) Issuance or renewal of a tax preparer's inactive license.
(7) Reactivation of a facilitator's inactive license or reactivation of a tax preparer's inactive license.
(8) Restoration of lapsed licenses.
(9) Issuance or replacement of a duplicate license.
(10) Issuance or renewal of a combined facilitator's or tax preparer's license for a sole proprietorship, partnership, corporation or other legal entity. The board shall determine eligibility for a combined license under regulations adopted by the board in accordance with chapter 54 of the general statutes.
Sec. 8. (NEW) (Effective October 1, 2016) Prior to providing any individual tax preparation services, a licensed tax preparer shall provide the client with a written disclosure consisting of:
(1) The tax preparer's name, address, telephone number and personal tax identification number from the United States Internal Revenue Service;
(2) A statement that the tax preparer is not a certified public accountant, an enrolled agent or a tax attorney;
(3) A list or description of the services that the tax preparer is qualified to provide;
(4) The tax preparer's education and training, including examinations taken and successfully passed; and
(5) The fees charged for individual tax preparation services that contains the following information: (A) A list of, description of, and the fee for each tax preparation service offered by the tax preparer, including fees for the preparation of individual forms; (B) a list of, description of, and price of all miscellaneous fees associated with the tax preparer's tax preparation services, including filing fees and processing fees; and (C) an estimate of the total charge to the client based upon the tax preparation services the client has selected to purchase.
Sec. 9. (NEW) (Effective October 1, 2016) (a) A tax preparer or facilitator shall not:
(1) Charge or impose any fee, charge or other consideration in the making or facilitating of a refund anticipation loan or refund anticipation check apart from the fee charged by the creditor or bank that provided the loan or check;
(2) Engage in unfair or deceptive acts or practices in the facilitating of a refund anticipation check or a refund anticipation loan, including making any oral statements contradicting any of the information required to be disclosed under the Taxpayer Bill of Rights, as set forth in the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as amended from time to time;
(3) Directly or indirectly arrange for a third party to charge any interest, fee or charge related to a refund anticipation loan or refund anticipation check;
(4) Include any of the following provisions in any documents provided or signed to obtain a refund anticipation loan or refund anticipation check, including the loan application or agreement: (A) A hold harmless clause; (B) a confession of judgment clause; (C) a waiver of the right to a jury trial; (D) any assignment of or order for payment of wages or other compensation for services; (E) a waiver of any provision of the Taxpayer Bill of Rights, as set forth in the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as amended from time to time; or (F) a waiver of the right to injunctive, declaratory, other equitable relief, or relief on a class-wide basis. Any such provisions shall be deemed void;
(5) Take or arrange for a creditor to take a security interest in any property interest of the taxpayer other than the proceeds of the tax refund to secure payment of a refund anticipation loan;
(6) Directly or indirectly, individually or in conjunction or cooperation with another person, engage in the collection of an outstanding or delinquent refund anticipation loan for any creditor or assignee;
(7) Make a misrepresentation of fact in obtaining or attempting to obtain a license;
(8) Fail or refuse to give a client, for the client's own records, a copy of any document requiring the client's signature, within a reasonable time after the client signs the document;
(9) Fail to maintain a copy of any tax return prepared for a client for four years from the date of completion or the due date of the return, whichever is later;
(10) Knowingly give false or misleading information to a client, surety company or the board; or
(11) Engage in any other action prohibited by regulations adopted by the State Board of Tax Practitioners, in accordance with the provisions of chapter 54 of the general statutes.
(b) If a tax preparer or facilitator violates any one of the provisions provided for in subsection (a) of this section, the tax preparer or facilitator shall pay a penalty not to exceed two thousand five hundred dollars for each such violation.
(c) If a tax preparer fails to sign his or her name to any return that requires the tax preparer's signature, or a facilitator fails to sign his or her name to any refund anticipation loan or refund anticipation check facilitation documentation, then the tax preparer or facilitator shall pay a penalty in the amount of two hundred twenty-five dollars for each failure to so sign. The maximum penalty that may be imposed under this subsection on any tax preparer with respect to returns filed during any calendar year by the tax preparer, or on any facilitator with respect to any refund anticipation loan or refund anticipation check facilitation documentation completed during any calendar year by the facilitator, shall not exceed two thousand five hundred dollars. If a tax preparer or facilitator has been penalized under this subsection for a preceding calendar year and again fails to sign his or her name on any return that requires the tax preparer's signature or again fails to sign his or her name on any refund anticipation loan or refund anticipation check facilitation documentation during a subsequent calendar year, the penalty under this subsection for each failure shall be five hundred dollars with no maximum penalty.
(d) If a tax preparer or a facilitator fails to include the unique identification number assigned by the board on any return, or any return anticipation loan or return anticipation check facilitation documentation that requires his or her signature, then the tax preparer or facilitator shall pay a penalty of one hundred dollars for each failure to include his or her unique identification number. The maximum penalty imposed under this subsection on any tax preparer or facilitator with respect to returns filed during any calendar year shall not exceed two thousand five hundred dollars; except if a tax preparer or facilitator has been penalized under this subsection for a preceding calendar year and again fails to include the unique identification number on one or more returns during a subsequent calendar year, then the penalty under this subsection for each failure shall be two hundred twenty-five dollars, with no maximum penalty.
(e) If a tax preparer, facilitator or a commercial tax return preparation business employs an individual to prepare tax returns who is not licensed by the board, then the tax preparer, facilitator or commercial tax return preparation business, as applicable, shall be subject to a penalty of five hundred dollars per violation.
(f) The board may waive any penalty imposed under this section only for good cause shown by the tax preparer or facilitator.
(g) Other provisions of this section, sections 1 to 8, inclusive, of this act and sections 10 to 16, inclusive, of this act or any other provision of law prescribing additional requirements applicable to tax preparers or facilitators shall not be affected by the provisions of this section except as set forth expressly in this section.
Sec. 10. (NEW) (Effective October 1, 2016) (a) It shall be a violation of sections 1 to 9, inclusive, of this act, this section and sections 11 to 16, inclusive, of this act for a tax preparer or facilitator to do or commit, and the State Board of Tax Practitioners may deny an application for registration or discipline a licensee for, any of the following:
(1) Unprofessional conduct, including, but not limited to, denial of licensure, certificate, permit, or registration, or revocation, suspension, restriction, or any other disciplinary action against an applicant or registrant by the federal government or another state or territory of the United States, by any other government agency, or by another professional licensing board or organization. A certified copy of the decision, order or judgment shall be conclusive evidence of such conduct.
(2) Procuring or attempting to procure a license by fraud, misrepresentation or mistake.
(3) Violating or attempting to violate, directly or indirectly, or assisting in or abetting the violation of, or conspiring to violate, any provision or term of this section, sections 1 to 9, inclusive, of this act and sections 11 to 16, inclusive, of this act or any regulation adopted by the State Board of Tax Practitioners.
(4) Conviction of any felony or misdemeanor that is substantially related to the qualifications, functions or duties of a licensee, in which event the record of the conviction shall be conclusive evidence of the crime.
(5) Impersonating an applicant or acting as a proxy for an applicant in any situation or examination referred to under this section, sections 1 to 9, inclusive, of this act and sections 11 to 16, inclusive, of this act for the issuance of a license.
(6) Impersonating a licensee, or permitting or allowing an unlicensed person to use a license.
(7) Committing any fraudulent, dishonest or corrupt act that is substantially related to the qualifications, functions or duties of a licensee.
(8) Each violation of this section shall constitute a separate offense.
(b) The State Board of Tax Practitioners may discipline a licensee by any, or a combination, of the following methods:
(1) Placing the license on probation.
(2) Suspending the license and the rights conferred by this section, sections 1 to 9, inclusive, of this act and sections 11 to 16, inclusive, of this act on a licensee for a period not to exceed one year.
(3) Revoking the license.
(4) Suspending or staying the disciplinary order, or portions of it, with or without conditions.
(5) Taking other action as the State Board of Tax Practitioners deems proper, as authorized by this section, sections 1 to 9, inclusive, of this act, and sections 11 to 16, inclusive, of this act or any regulations adopted under said sections.
(c) The State Board of Tax Practitioners may issue an initial license on probation, with specific terms and conditions, to any applicant.
(d) If a license is suspended or revoked, the State Board of Tax Practitioners shall notify the Department of Revenue Services and the federal Internal Revenue Service.
Sec. 11. (NEW) (Effective October 1, 2016) (a) Except as provided in subsection (b) of this section, upon annual renewal of a tax preparer's or facilitator's license, each person licensed as a facilitator or tax preparer shall submit evidence satisfactory to the State Board of Tax Practitioners that the person has completed at least twenty hours of instruction or seminars in subjects related to income tax preparation since the granting of the initial license or the preceding license renewal date, as applicable. If the board does not receive evidence that the continuing education requirement has been completed by the applicant, the board shall not renew the applicant's active license.
(b) The board may exempt a tax preparer or facilitator from the continuing education required by this section upon application showing evidence satisfactory to the board of inability to comply because of unusual or extenuating circumstances, including medical reason, military duty or other good cause to be approved by the board.
Sec. 12. (NEW) (Effective October 1, 2016) (a) Whenever a tax preparer or facilitator ceases to engage in the preparation of or in advising or assisting in the preparation of personal income tax returns, such tax preparer or facilitator may apply to the State Board of Tax Practitioners for inactive status. A license that is granted inactive status may be renewed upon payment of the applicable license fee. No proof that the continuing education required by section 11 of this act has been fulfilled need be presented to the board for renewal of an inactive license.
(b) A license in inactive status may be reactivated upon payment of a reactivation fee, that shall be provided upon proof of compliance with such continuing education requirements as may be adopted by the board by regulations adopted in accordance with chapter 54 of the general statutes.
(c) A license in inactive status may be revoked or suspended by the board when conditions exist under which the board would have been authorized to revoke or suspend the license if it were active.
(d) No person whose license is inactive shall act as a tax preparer or facilitator.
Sec. 13. (NEW) (Effective October 1, 2016) The following individuals are exempt from the requirements of sections 1 to 12, inclusive, of this act and sections 14 to 16, inclusive, of this act:
(1) An individual in good standing with an active license issued by the Connecticut State Board of Accountancy;
(2) An individual in good standing and admitted to practice law in the state of Connecticut or in another state, and employees of attorneys, or firms thereof preparing returns under the supervision of such attorneys;
(3) An individual employed by a local, state or federal governmental agency but only in performance of his or her official duties;
(4) An individual enrolled to practice before the Internal Revenue Service who is governed under Circular 230;
(5) An individual serving as an employee of or assistant to an individual tax preparer or an individual exempted under this section in the performance of official duties for the individual tax preparer or the individual exempted under this section;
(6) Any full-time or part-time employee hired to fill a permanent position, in connection with the duties as an employee who has the incidental duty of preparing income tax returns for the business of the employer only;
(7) While acting as such, any fiduciary, or the regular employees thereof, acting on behalf of the fiduciary estate, the testator, grantor or beneficiaries thereof;
(8) A certified public accountant that holds an active firm permit or license issued by any state, a public accountant holding a valid permit issued under a public accounting firm registered in any state; and
(9) Internal Revenue Services qualified tax preparers, including, but not limited to, tax preparers of the Volunteer Income Tax Association and Tax Counseling for the Elderly.
Sec. 14. (NEW) (Effective October 1, 2016) (a) Any person who violates any provision of this section, sections 1 to 13, inclusive, of this act and sections 15 and 16 of this act, in addition to any other penalty provided by said sections, may be subject to a civil penalty of not more than two thousand five hundred dollars for each violation. The amount of the penalty shall be determined by the State Board of Tax Practitioners after taking into consideration the gravity of the violation, the previous record of the violator in complying, or in failing to comply, with the regulations adopted by the board and other considerations as the board considers appropriate.
(b) All penalties recovered under this section shall be paid into the General Fund. Under appropriate circumstances, as a further remedy in a proceeding which may or may not result in imposition of a civil penalty or in cancellation, suspension, revocation or refusal to renew a facilitator's or tax preparer's license, the State Board of Tax Practitioners may impose the requirement of successful participation and completion of an educational program specified by the board as a correction or as a condition to reissuance, restoration, retention or renewal of the license.
Sec. 15. (NEW) (Effective October 1, 2016) (a) The Board of State Tax Practitioners may issue an order directed to a person to cease and desist from any violation or threatened violation of this section or sections 1 to 14, inclusive, of this act or section 16 of this act, or any regulation or order adopted thereunder, if the board has reason to believe that a person has been engaged, is engaging or is about to engage in any violation of said sections, or any regulation or order adopted thereunder. Upon entry of a cease and desist order, the board shall promptly serve notice of the cease and desist order upon the person engaging in or about to engage in such violation. Such notice shall state that a hearing will be held on the cease and desist order if the recipient of the order files a written demand for a hearing with the board not later than twenty days after the date of service of the cease and desist order.
(b) If timely demand for a hearing is filed under subsection (a) of this section, the board shall hold a contested case hearing, in accordance with the provisions of chapter 54 of the general statutes, on the cease and desist order. In the event of a contested case hearing, the civil penalties assessed in the cease and desist order shall be suspended until issuance of a final order, but the remaining provisions of the cease and desist order shall remain in full force and effect until issuance of the final order.
(c) After the hearing, the board shall enter a final order vacating, modifying or affirming the cease and desist order. Any person aggrieved by a cease and desist order of the board that was the subject of a contested case hearing may appeal such order in accordance with the provisions of section 4-183 of the general statutes.
(d) Any judicial review of a cease and desist order under subsection (c) of this section shall not bar the board from thereafter vacating or modifying a cease and desist order involved in the proceeding for review, or entering any new order, for a proper cause that was not decided by the reviewing court.
(e) The board may seek injunctive relief in the event a person fails to comply with a cease and desist order.
Sec. 16. (NEW) (Effective October 1, 2016) A violation of the provisions of sections 1 to 15, inclusive, of this act shall be deemed to be an unfair trade practice within the provisions of chapter 735a of the general statutes.
This act shall take effect as follows and shall amend the following sections: | ||
Section 1 |
October 1, 2016 |
New section |
Sec. 2 |
October 1, 2016 |
New section |
Sec. 3 |
October 1, 2016 |
New section |
Sec. 4 |
October 1, 2016 |
New section |
Sec. 5 |
October 1, 2016 |
New section |
Sec. 6 |
October 1, 2016 |
New section |
Sec. 7 |
October 1, 2016 |
New section |
Sec. 8 |
October 1, 2016 |
New section |
Sec. 9 |
October 1, 2016 |
New section |
Sec. 10 |
October 1, 2016 |
New section |
Sec. 11 |
October 1, 2016 |
New section |
Sec. 12 |
October 1, 2016 |
New section |
Sec. 13 |
October 1, 2016 |
New section |
Sec. 14 |
October 1, 2016 |
New section |
Sec. 15 |
October 1, 2016 |
New section |
Sec. 16 |
October 1, 2016 |
New section |
Statement of Purpose:
To require the licensing of tax preparers and facilitators and to create a State Board of Tax Practitioners to issue the licenses and enforce the licensing requirements.
[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not underlined.]