What do I need to know, as a New York tax return preparer?
Effective January 1, 2009, New York tax preparers* must provide the following to their tax clients:
- Preparer’s contact information
- Copy of NY Publication 135, “Consumer Bill of Rights Regarding Tax Preparers”
- Disclosure statement regarding Refund Anticipation Checks (RACs)
Failure to comply with these requirements can result in the following civil penalties:
- For the first violation: not less than $250, but not more than $500
- For subsequent violations: not less than $500, but not more than $750
The following is a summary regarding these regulations. For more information, review links below.
- The CONTACT INFORMATION requirement can be met by having your firm’s information printed on the client bill. To do so, go to the Client Communications Editor (Setup > Communications Editor), select Setup > Letterhead, Margins and Border, and select Use Letterhead on Bill.
- Publication 135 must be distributed to the client PRIOR TO any discussion about tax preparation with the client. This document is available:
- from the NY DOR website: Publication 135
- through a link in the software on the NY FAQ page
Note: Some tax preparers are exempt from the requirements regarding contact information and Publication 135. See links below.
- The REQUIRED DISCLOSURE STATEMENT must be read and signed by the taxpayer BEFORE entering into a bank product agreement. The software automatically generates the disclosure statement with any return that has a bank product indicated on the BANK screen.
A PDF of the disclosure statement is available in links below. This PDF is identical to the one generated by the software, with the exception that all taxpayer-specific information (such as estimated refund amounts) must be entered manually.
The disclosure statement in the program provides all required information, as listed below:
- Statement that the taxpayer is not required to enter into a RAC agreement
- Clarification that a RAC is a loan (not a refund), and that the taxpayer will be required to repay the loan, along with all related fees and costs
- Amount of federal refund the taxpayer would receive if he or she does NOT take the RAC
- Amount the taxpayer is required to pay if he or she DOES take the RAC, and the approximate remaining amount he or she will receive
- Estimated annual percentage rate of the RAC
- Approximate date the taxpayer can expect to receive the RAC funds
- Approximate dates taxpayer can expect to receive the federal refund if no RAC is taken and if e-filing the return and (a) receiving the refund by mail, or (b) receiving the refund by direct deposit
For more information, and for further technical guidance, see the following links:
*Tax preparers operating in New York City are not subject to the regulations described above. They are, however, subject to similar rules that apply specifically to NYC preparers. For information on these regulations, see NY City Consumer Bill of Rights.