New York Governor Andrew Cuomo said Wednesday that 40 tax preparers across the state have been suspended by the state tax department under new regulations requiring them to file their own taxes.

The 40 preparers failed to file their own tax returns for 2011 and 2012. Once they have been suspended, preparers cannot legally complete or file a client’s state tax returns for compensation.

“These new rules were put into place to protect taxpayers and ensure those entrusted to prepare tax returns abide by real professional standards,” Cuomo said in a statement. “By disqualifying those who fail to live up to their responsibilities, we are strengthening the system and ensuring that the millions of New Yorkers who use a tax preparation service receive what they paid for.”

New York is one of only four states in the nation that regulate the tax preparer industry in an effort to reduce errors and omissions on tax returns, reduce fraud, and increase the level of competence and ethics among preparers. The other states are California, Oregon and Maryland. Cuomo announced new regulations in March to identify and stop fraud and scams with new, comprehensive rules covering the 40,000 tax preparers throughout the state.

Since 2011, the majority of tax preparers have been required to register annually with the New York State Department of Taxation and Finance. Building on the registration, Cuomo announced in March that for the first time in New York State, most individuals who are paid to prepare at least ten New York State tax returns in a year will be required to pass a state competency examination; be at least 18 years of age and be a high school graduate, or possess the equivalent of a high school degree; meet applicable IRS requirements; and take four hours of annual continuing education.  Beginning tax return preparers with less than three years of experience preparing New York State tax returns must also take a 16-hour basic tax course. Violation of the new standards could result in a range of disciplinary actions, from remedial education to suspension or cancellation of a preparer’s registration.

“It’s this simple: if you don’t file your own taxes, you shouldn’t be allowed to file returns for other New Yorkers,” said Commissioner of Taxation and Finance Thomas H. Mattox in a statement. “Without our new regulations, we would have no recourse against these preparers or others who are plainly unqualified.”

The tax department’s Office of Professional Responsibility holds the authority to discipline a tax return preparer who fails to comply with his or her own federal, state or local tax obligations in a timely fashion.

The tax department also recently issued 56 suspension letters. Of these, 16 preparers who received the disciplinary notices filed a formal protest challenging the action, which is allowed under the regulations. Those appeals are currently under review.

Register or login for access to this item and much more

All Accounting Today content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access