Monday, September 21, 2015


As a professional “commercial” tax return preparer, regardless of where I live or practice, if I want to be able to prepare New York state income tax returns for compensation, and I am not a CPA, attorney, or Enrolled Agent (EA), I must register with the state of New York, pay a $100 fee, and receive a “New York Tax Preparer Registration Identification Number”, much like I had to register with the IRS, pay a fee, and receive a Preparer Tax Identification Number (PTIN).  The $100 fee to NY State is due each year to renew my authority to prepare NY returns, just as the IRS charges an annual fee to renew my PTIN.

Before 2015 there was no CPE or testing requirement for registration.  You just had to pay the annual $100 fee.  I recovered this expense by charging each of the 20 or so clients for whom I prepared a NY resident or non-resident individual income tax return (IT-201 or IT-203) $5.00, which I separately identified on my invoice as “NY State Tax Preparer Extortion Fee Surcharge”.

But now, in order to renew my authority to prepare 2015 NY State returns, I not only have to pay $100, but I also must complete a special 4-hour program of continuing education.  I qualify for the limited 4-hour program because I have prepared ten or more New York State personal income tax returns during the years 2011, 2012, and 2013.  All other preparers must complete a 16-hour program.

While it is obvious why Enrolled Agents are exempt from the required CPE, there is no reason why CPAs and attorneys who want to prepare NY State tax returns should also be exempt.  If New York is sincerely concerned about assuring the competence and currency of tax preparers they should expand the CPE, and eventual testing, requirements to CPAs and attorneys.  A recent post from Jason Dinesen that I will reference in tomorrow’s BUZZ installment highlights the fact that CPAs make at least as many errors on tax returns as “unenrolled” preparers.  CPAs and attorneys were only exempt from the $100 annual extortion fee because the state already got a registration fee out of them.

The State of New York is the only authorized provider of the 4-hour requirement, and the 16-hour one for new preparers.  And they are currently only offered online.  I tried for a long time to register online for the 4-hour program, but without any success.   

When I was finally able to gain access to the registration for the webinars the process was easy.  This was actually my first experience with online webinars.  Looked at objectively the presentations and content were more than satisfactory.  But looking at them in terms of substantive continuing education value is another thing altogether. 

While I had originally preferred to attend an actual live seminar, as it turned out, considering the content and methodology, I was much happier satisfying the requirement online.  I have no problem whatsoever taking 4 hours of NY State CPE via free online webinars of this kind each year, as long as they provide 3 1/3 hours of substantive continuing education value (a CPE hour is traditionally 50 minutes of actual content).

The required four hours consisted of 5 separate webinars –

·      Overview of Preparer Role and State Oversight (20 minutes)
·      Federal Update (1 hour)
·      New York State Tax Law Update (1 hour)
·      Common Errors (1/2 hour)
·      Standards of Conduct and Penalties (the longest session - 1 hour 10 minutes)

I “took” the sessions in two separate “sittings” of approximately 2 hours each.  I was indeed pleased that it could be done in parts at my leisure.

There are a series of multiple choice review questions asked after each session.  However this is not a “test”, but a review of the material covered.  The answer is only recorded once you get it correct.  If your first choice is wrong you are told so and can continue until you get it right before proceeding.  I was very pleased with this process and found that it is actually better for comprehension of the material.

And after each presentation one can print out a Certificate of Completion.  Before printing you are asked for your full name and “OLS User ID”, which is printed on the certificate.  I had absolutely no idea what my “OLS User ID” was – so I entered my New York Tax Preparer Registration Identification Number.  It did not reject the number, so I guess it was ok. 
To be perfectly honest all of the four-hours of sessions were a total waste of my time.  They were either redundant or unnecessary or covered the wrong year. Thankfully there was no charge or related out-of-pocket expense (such as travel) involved (other than the annual $100 registration fee).

The overview was basically an explanation of the NY State tax preparer registration program.  Of no substantive value as continuing education.

The federal update component is redundant and a true waste of time for me, and for any serious and responsible tax preparer who is already taking federal update CPE elsewhere.  The federal update class I sat through is actually a total waste of time for all preparers – as it concerned changes, mostly the inflation adjusted numbers, for tax year 2014 and NOT 2015.  I could have been watching an episode of “Hart to Hart” on the “Hallmark Movies and Mysteries” cable channel instead!

The New York State update webinar was obviously the only one with any potential continuing education value for me.  Unfortunately it, too, was an update for tax year 2014 and NOT 2015.  Another total waste of my time.  I will have to wait until January 2016 to learn what’s new for NY State for 2015 from Kathryn Keane at the NJ-NATP annual “Famous State Tax Seminar”.  I did actually learn a few new things – but they were general information items and nothing that would actually affect any of my existing NY State filers (I do not accept any new clients – so I really don’t need to know this new stuff and it was of no real value to me).  The presentation also covered some corporate, estate, and trust items, which is fine but of no value to me (I do not prepare NY State corporation, estate, or trust returns).

A common error component is not a bad idea, but the errors discussed were basic and mostly of a procedural nature.  The session did not cover detailed specific tax law errors.  While of no real substantive value as continuing education for me, it was an adequate basic review.

The Standards of Conduct and Penalties section was the ethics class.  As noted above, this was the longest of the 5 presentations.  It was a total waste of time – with no substantive continuing education value for me.  How many times do I have to say this – forcing a crooked (or ethically-challenged) tax preparer to sit through annual redundant ethics preaching ain’t going to turn him/her honest!  This session repeated much of the discussion from the overview component, and there were also redundancies within the presentation.  Unfortunately I already have to sit through at least 2 hours of federal redundant ethics preaching each year (not because I am required to, but because most providers of day-long federal CPE update presentations feel they have to include ethics preaching) – this just added to the number of hours lost to me that I will never get back again.

It seems obvious to me that preparers who are required to take the 4-hour program should be allowed to use CPE from other qualified providers to satisfy the update (at least federal) and ethics components.  I take a the NATP 8-hour year-end Essential 1040 federal tax update each year, and attend the NJ-NATP “Famous State Tax Seminar” each January, which usually includes at least 1 CPE of NY state tax updates.  And, of course, as mentioned above, just about every CPE offering includes redundant ethics preaching.  My attendance at these offerings should be able to satisfy most of the 4-hour requirements so I do not have to waste my time sitting through the state’s redundant online sessions.  While there is no charge to take the NYS sessions online – my time is worth money!

So, having totally wasted 3+ hours of my valuable time, now all I have to do is send my $100 to New York in December.  Along with my annual PTIN renewal fee this is the business expense that I hate paying the most.

At some point in the next 3 years it appears that I must pass a NY State “competency” test.  As with the now dead IRS RTRP regulation regime, I feel that, as a veteran preparer of NY State returns, I should receive a “grandfather” exemption from this test.  But that is not going to happen.  I am, however, glad that I will be able to take the test free of charge (?) online on my home office computer.

I would be interested in hearing the thoughts of my fellow tax professionals on this subject.

And I would hope New York tax professionals with the proper contacts will pass this post on to their colleagues and appropriate members of the NY Department of Taxation and Finance.



Anonymous said...

Please let us know the response you get from the NY Department of Taxation and Finance after you send this to them.

Protaxtinator said...

I agree with everything that you said, except to add an additional wrinkle. I am a NY State preparer and do prepare more than 400 returns, so don't mind the process EXCEPT, I have spent more hours on the phone with the ON Line Services people to get my on line service account to recognize that I qualify for the 4 hour course (1 hour) to get the 4 hour course to actually load (another hour) and today when I tried to actually take the second part of the course it wouldn't load again so another hour trying to play with it to make it load. I can't call the ONS today because it is Veterans Day and they are closed, so another 2 hours lost and I haven't even taken the course yet!!! I started this process in August..... they keep telling me they don't understand why the system isn't working for me, I'd have been better off taking a live course which I also do, but that one doesn't count!

Anonymous said...

I am having the same frustrating problem in that none of the courses that I took including the mandated 4 hour CPE curriculum plus optional courses don't upload into Certifications and therefore I can't register for a 2016 NYS EFIN. I have spent hours on the phone with them with no avail and now they tell me that they are sending a technical support ticket in and I won't hear back for another 7-10 days.

Is there something that you or they did that allowed the system to update that I can do from here? Also, Anonymous above stated that he used his NYS Registration number for the UserID number with his name after completing each course. I used my Username, not my Registration number. However each time I spoke with someone they said that they could see that I completed the courses and had a completion certificate and don't understand why it is not migrating to the Certifications and registration page.

Anything you can do to help would be appreciated. My email is THanks, Andy Powers

Robert D Flach said...

AJP (aka Anon) -

It was some time now since I wasted 4 hours on the online CPE and submitted my registration application and received my Tax Preparer Certificate of Registration for 1/1-12/31/2016 from NYS. I do not recall if I did anything special - I just followed the instructions.

Sorry - but I do not know what to tell you.

Can anyone else out there provide any help?


Anonymous said...

I recently completed the 16-hour "2016 Registration Education Requirements" set of courses so I could register as a paid preparer for the 1st time. I was able to print my certificate and all of the course were marked as Completed. However, when I attempted to register and obtain my ID I received a pop-up window at the end of the registration process that said "Our records indicate you have not completed your mandatory tax preparer education requirements."

Way to go, NY. My only recourse now is to call a number in Albany and try to get it resolved.

Anonymous said...

To "anonymous" above: It takes a few hours (or more) before you can register. You just have to wait.

Unknown said...

It now says on NY page that the online education link is not working and we can use last year's PTIN number without penalty until after February 1st, which is of course the busiest time of the year for most NY income tax preparers. This is absolutely crazy to require something and then be out of service for more than a month in allowing the process to be completed.

Heather B said...

Thanks for your blog. Upon reading the requirements I think getting your EA is much easier than this. As an EA in California, I'm glad I have mine in cases like this.

Anonymous said...

I am not a lawyer but would like to know how the NYS Tax Preparer Requirements are constitutional when the same program by thefeds was deemed unconstitutional?

Has anyone filed or will file a lawsuit against NYS?

Thinking said...

I believe the Federal requirements were not legal as the IRS did not have authority to expand Circular 230 practice regulations to unenrolled preparers. The authority for the IRS to regulate practice via Circular 230, is based on statute, so whatever that statute allows the IRS can regulate, but whatever the statute does not allow the IRS could not regulate. With regard to NYS, I believe these requirements are via statute, which means that the law says NYS can regulate the practice. This is the key difference (i.e. there was no federal law allowing the IRS to regulate practice of unenrolled preparer whereas there is state law allowing NYS to regulate preparers).

Btw, I am a CPA and we are already subject to mandatory CPE (40 hours per year) which includes an ethics requirement.