SB402

ENGROSSED

By Senator Melson

A BILL TO BE ENTITLED AN ACT

To provide for the registration and regulation of certain individual tax preparers; to provide for registration exemptions; to prohibit individuals not registered from conducting tax preparation services; to provide penalties for violations; and to create the Alabama Taxpayer Protection and Assistance Act Advisory Council for the purpose of determining acceptable examinations, continuing education requirements, and certifications.

BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:

Section 1. This act shall be known and may be cited as the "Alabama Taxpayer Protection and Assistance Act."

Section 2. The Alabama Taxpayer Protection and Assistance Act is enacted to protect consumers by establishing a registration program to ensure that qualified individuals provide individual tax preparation services.

Section 3. When used in this act, the following terms shall have the following meanings:

(1) CONSUMER. Any natural person who, singly or jointly with another consumer, pays an individual tax preparer to prepare his or her individual state tax return.

(2) DEPARTMENT. The Alabama Department of Revenue.

(3) INDIVIDUAL TAX PREPARER. An individual who is registered by the Department to provide Alabama individual tax preparation services.

(4) IN GOOD STANDING. An individual tax preparer whose registration is not expired, suspended, or revoked.

(5) PERSON. An individual, firm, proprietorship, association, corporation, or another entity.

(6) INDIVIDUAL TAX PREPARATION SERVICES. To prepare, advise, or assist in the preparation of, or assume final responsibility for, preparation of another individual's state personal income tax return for valuable consideration.

(7) PTIN. Preparer Tax Identification Number issued by the Internal Revenue Service.

(8) REGISTRATION. An authorization issued by the Department to provide individual tax preparation services.

(9) SUPERVISION. The direct onsite supervision of another employee, including responsibilities of directing, assigning, and reviewing the employee’s work.

(10) TAX RETURN. A return, declaration, statement, refund claim, or other document required to be made or filed in connection with state income taxes.

Section 4. The following individuals are exempt from the requirements of this act:

(1) Any individual licensed or otherwise authorized to practice accountancy in the state of Alabama, or to any supervised person working for such an individual, when said individual or supervised person is performing duties within the scope of accountancy statutes and/or regulations.

(2) An individual in good standing and admitted to practice law in this state.

(3) An individual enrolled to practice before the Internal Revenue Service, or to any supervised person working for such person when said individual or supervised person is performing duties within the scope of taxation statutes and/or regulations.

(4) Any individual who otherwise has a satisfactory certification, as prescribed the commissioner.

Section 5. No person may provide tax preparation services of Alabama individual income tax returns, unless registered with the Department. This provision does not apply to persons exempt under Section 4, provided that such persons provide an IRS issued Preparer Tax Identification Number when submitting a return and signing as a paid preparer. Upon meeting all registration requirements, the Individual Tax Preparer shall be issued an Alabama registration number.

Section 6. a) The Department is authorized to investigate a complaint that alleges a violation of this act.

(b) On receipt of the results of an investigation made under this section, the Department shall promptly take action that is appropriate under this act to ensure compliance with this act.

(c) If the Department concludes that conduct alleged to be in violation of this act will result in harm to a resident of the state, the Department may seek a permanent or temporary injunction with respect to the conduct from the circuit court of the county in which the alleged violation occurred.

(d) In seeking an injunction under this subsection, the Department is not required to post bond or prove that an adequate remedy at law does not exist.

(e) The Department or its designee may issue a subpoena for the attendance of witnesses to testify or the production of evidence in connection with a disciplinary action brought under this act or a proceeding brought for an alleged violation of this act.

(f) If an individual fails to comply with a subpoena issued under this section a court of competent jurisdiction may compel compliance with the subpoena.

Section 7. (a) The Department shall confirm the registration status of any applicant.

Section 8. (a) A person shall be registered by the Department before such person is authorized to provide individual tax preparation services.

(b) To qualify for registration, the applicant shall meet the following minimum requirements that he or she:

(1) Has never been convicted of a felony, relating to individual tax preparation services.

(2) Is at least 18 years of age.

(3) Possess a high school diploma or have passed a graduation equivalency examination.

(4) Submit an application in a manner prescribed by the Department.

(5) Be a citizen of the United States or, if not a citizen of the United States, a person who is legally present in the United States with appropriate documentation from the federal government.

Section 9. (a) An applicant who otherwise qualifies for registration may be examined as provided in this section.

(b) The Department may require examinations for applicants, in a manner prescribed by the Department.

Section 10. (a) The Department shall issue a registration number to each qualified applicant who has passed the examination; if applicable.

(b) A registration authorizes the person to provide individual tax preparation services.

(c) Unless renewed, a registration expires on the first December 31 after the effective date of the registration.

(d) Before a registration expires, the person may renew the registration for an additional one-year term if the person meets the following requirements:

(1) Otherwise is entitled to be registered.

(2) Submits to the Department a renewal application in a manner prescribed by the Department and satisfactory evidence of compliance with the continuing education requirements set by the Department for registration renewal.

(e) The Department shall renew the registration of each person who meets the requirements of this section.

Section 11. (a) The Department shall adopt continuing education requirements as a condition of the renewal of a registration issued under this act.

(b) The department will prescribe the continuing education requirements and in what manner these requirements will be submitted to the department. Such continuing education requirements may be provided by IRS or state board of public accountancy approved continuing education providers.

Section 12. (a) The Department shall adopt rules for the reinstatement of a person who has failed to renew a registration for any reason if the individual otherwise is entitled to be registered and complies with the continuing education requirements set by the Department.

(b) The Department may deny a registration to any applicant, reprimand any registered individual tax preparer, or suspend or revoke a registration if the applicant or registered individual tax preparer does any of the following:

(1) Fraudulently or deceptively obtains or attempts to obtain a registration for the applicant or registered individual tax preparer or for another.

(2) Fraudulently or deceptively uses a registration.

(3) Under the laws of the United States or of any state, is convicted of a felony or a misdemeanor directly related to the fitness and qualification of the applicant or registered individual tax preparer to provide individual tax preparation services.

(4) Is guilty of negligence, incompetence, or misconduct while providing individual tax preparation services.

(5) Violates any provision of this act.

(c) Civil penalties for unethical tax preparation imposed under this act, will be imposed as prescribed under 40-2A-11.1.

Section 13. (a) An individual tax preparer shall maintain all records of personal income tax returns prepared by the individual tax preparer for a time frame prescribed by the Department, but in no case less than three years.

(b) Prior to rendering individual tax preparation services, an individual tax preparer shall disclose to the consumer, in writing, the individual tax preparer's name, state preparer registration number, physical address, email address, and telephone number.

(c) The individual tax preparer may not use the terms "certified" or "registered" in any advertisement, website, business cards, or any other information or materials made available to the public in reference to himself or herself.

(d) The disclosure required under subsection (b) shall be provided to a consumer in writing and, if the individual tax preparer maintains a website, on the website.

(e) An individual tax preparer may not do any of the following:

(1) Fail to sign a consumer's individual tax return.

(2) Obtain the consumer's signature on an individual tax return or other authorization document prior to the completion of the individual tax preparation services.

(3) Disclose information received for the purposes of preparing a consumer's state income tax return, unless consented to in writing by the consumer, or in accordance with a court order.

(f) A penalty of 100 dollars will be imposed for each violation under (e) of this section.

Section 14. Except as otherwise provided in this act, a person may not provide, attempt to provide, or offer to provide individual tax preparation services in the state unless registered by the Department.

Section 15. Any person who violates Section 14 of this act, shall, upon conviction, be guilty of a class C misdemeanor.

Section 16. An Alabama Taxpayer Protection and Assistance Act Advisory Council is hereby created. The Council shall be comprised of no more than (10) representatives of the accounting and taxation industry, appointed by the commissioner of the department. The Commissioner of the Department, or his or her designee, shall chair the Council. The Council shall make recommendations to the department for implementing the provisions of this bill, including but not limited to, assisting the department with developing rules, acceptable examination, continuing education requirements, and certifications of other qualified individuals. The Council shall meet at least quarterly or otherwise at the call of the chair. Members of the Council shall serve without compensation.

Section 17. The department shall adopt rules to assist with the implementation and enforcement of this act.

Section 18. The provisions of this act are servable. If any part of this act is declared invalid or unconstitutional, that declaration shall not affect the part which remains.

Section 19. All laws or parts of laws which conflict with this act are hereby repealed.