New Jersey-2022-A1557-Amended

Sponsored by:

Assemblyman PAUL D. MORIARTY

District 4 (Camden and Gloucester)

Assemblyman STERLEY S. STANLEY

District 18 (Middlesex)

Assemblyman RAJ MUKHERJI

District 33 (Hudson)

Co-Sponsored by:

Assemblywoman Quijano and Assemblyman Giblin

SYNOPSIS

Prohibits tax preparers from engaging in certain practices involving refund anticipation checks and loans.

CURRENT VERSION OF TEXT

As reported by the Assembly Regulated Professions Committee on June 2, 2022, with amendments.

An Act concerning tax refund anticipation loans and checks and amending and supplementing P.L.2007, c.258 (C.17:11D-1 et seq.).

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. Section 1 of P.L.2007, c.258 (C.17:11D-1) is amended to read as follows:

1. As used in this act:

"Client" means an individual who engages the services of a tax preparer.

"Commissioner" means the Commissioner of Banking and Insurance.

"Refund anticipation check" means a check, stored value card, or other payment mechanism representing the actual or anticipated proceeds of the client's federal or State income tax refund which was issued by a depository institution, tax preparer, or other person that received or anticipates receipt of a direct deposit of the client's federal or State income tax refund and for which the client has paid a fee or other consideration for such payment mechanism.

"Refund anticipation loan" means a loan that is secured by, or that the tax preparer anticipates from, a client's federal or State income tax refund.

"Tax preparation services" means services provided for a fee or other consideration to a client to:

(1) assist with preparing or filing State or federal individual income tax returns;

(2) assume final responsibility for completed work on an individual income tax return on which preliminary work has been completed by another; or

(3) offer, facilitate, or make refund anticipation loans or checks.

"Tax preparer" means an individual, corporation, partnership, limited liability company, association, trustee or other entity who provides tax preparation services.

(cf: P.L.2007, c.258, s.1)

2. Section 2 of P.L.2007, c.258 (C.17:11D-2) is amended to read as follows:

2. No tax preparer shall:

a. Without reasonable cause, fail to promptly, diligently and without unreasonable delay complete a client's tax return;

b. Obtain the signature of a client to a tax return or authorizing document containing blank entries to be completed after the document has been signed;

c. Fail to sign a client's tax return as the tax preparer;

d. Fail or refuse to give a client a copy of any document requiring the client's signature within a reasonable time after the client signs the document;

e. Fail to retain for at least four years a copy of individual income tax returns;

f. Fail to maintain a confidential relationship with a client or former client;

g. Fail to take reasonable measures to maintain the confidentiality of information or documents provided by the client;

h. Produce, authorize, publish, disseminate, circulate, or cause to make any false, deceptive, or misleading statement or representation relating to or in connection with the offering or provision of tax preparation services;

i. Require a client to enter into a refund anticipation loan or refund anticipation check agreement in order to complete a tax return;

j. Claim, or make representations to a client concerning, credits or deductions for which the tax preparer knows or reasonably should know the client does not qualify;

k. Charge, offer to accept, or accept a fee based on a percentage of an anticipated refund in exchange for tax preparation services; [or]

l. Withhold or decline to return to a client documentation provided by the client for use in preparing a client's tax return; or

m. Provide, offer, or advertise refund anticipation loan or check services using terms such as "free," "no cost," "no fee," or other language that would lead a client to reasonably believe that the refund anticipation loan or refund anticipation check is provided at no cost to the client if the issuance of a refund anticipation loan or refund anticipation check results in, or is predicated upon, the assessment of higher or additional fees for other tax preparation or other services than are charged to clients who do not receive refund anticipation loan or refund anticipation check services.

(cf: P.L.2007, c.258, s.2)

3. Section 4 of P.L.2007, c.258 (C.17:11D-4) is amended to read as follows:

4. A tax preparer shall provide an itemized statement of all service charges and fees to the client, including, but not limited to, ¹[charges for]¹ ²charges and fees for² each of the following:

a. tax return preparation;

b. electronic filing of a tax return; [and]

c. providing or facilitating a refund anticipation loan or refund anticipation check; and

d. ²[¹to the extent applicable,¹] (1) any² interest, including the estimated amount of interest in the event a refund is delayed, under the terms and conditions of a refund anticipation loan ²[or] ; and (2) any amounts to be paid to the tax preparer in the event a refund is delayed, under the terms and conditions of a² refund anticipation check.

(cf: P.L.2007, c.258, s.4)

4. (New section) It shall be an unlawful practice and violation of P.L.1960, c.39 (C.56:8-1 et seq.) for a tax preparer to violate any provision of P.L.2007, c.258 (C.17:11D-1 et seq.).

5. This act shall take effect immediately ²[¹and shall be applicable to services rendered for taxable years after the year in which it was enacted¹] and its application shall begin with tax filings prepared in 2023 for calendar year 2022².