Friday, October 9, 2009



I guess we are screwed. Regardless of the physical location of your tax preparation practice, if you meet the requirements of a “commercial preparer” under the law you must pay the GDMFBs in Albany $100.00 if you want to prepare 2009 NYS tax returns for your clients.

According to this item from the latest issue of NATP’s weekly online newsletter you are required whether your office is in Buffalo, New York, Jersey City, New Jersey, or Nome, Alaska!

New York State Requires Preparer Registration

Normally, NATP does not report on state issues. We made an exception in this case because of the far-reaching implications this new law may have on anyone in the nation who prepares New York state income tax returns.

The State of New York passed a registration law earlier in the year that applies to everyone who prepares New York State income tax returns…that means out-of-state preparers too! This is an annual requirement.

You must register if you do one of the following:

* Prepare New York State income tax returns in 2010 as a tax return preparer.

* Help to issue or administer a refund anticipation loan or refund anticipation check.

You must pay a $100 registration fee if:

* You were paid to prepare 10 or more New York State tax returns in 2009, and will prepare at least one personal income tax return in 2010; or

* You will be paid to prepare 10 or more tax returns for 2010.

With regard to Circular 230 preparers, only CPAs and attorneys licensed in the state of New York are exempt from this requirement. EAs are not exempt. No one is exempt if they are not licensed in the state of New York whether CPAs, attorneys, or EAs.

The law provides for some fairly stiff penalties for not registering (beginning at $250) or not signing prepared returns ($250 for each return not signed), or filing returns without the unique ID# assigned at registration ($100 for each failure), or for employing a tax return preparer who is not registered ($500 per occurrence). There’s also a penalty for failing to pay the fee ($50 for each return). Those who haven’t registered or paid the fee (if required) will not be permitted to represent their clients before the Division of Taxes or the Division of Appeals.

There is a list of prohibited acts that carry a $500 penalty for each violation in addition to the above listed penalties. There are ways to abate these penalties as well.

For a more detailed description of this far-reaching law, click here.

To access the New York State informational web page, click here.

To see a discussion of this in the New York Chapter newsletter, click here.

To see the slides the New York Department of Taxation and Finance is using to educate tax return preparers, click here.

If you need to talk to someone in the New York Department of Taxation and Finance about this, you may contact Suzanne Reusch at 716.855.5302

A fellow tax blogger has informed me that a similar notice was sent to ALL franchisees of a national tax preparation chain.

I am curious to know if any of the tax preparation membership organizations are planning to seek a Court ruling on New York State’s authority to force preparers with absolutely no physical presence in New York State to pay this fee.

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