The New York State Department of Taxation and Finance has launched a continuing education program as part of the state’s efforts to regulate tax preparers.
The new training program aims to ensure that—for the first time in New York history—those who prepare taxes for others are adequately trained. The program is part of New York’s consumer protection initiative to improve the overall standards of the tax preparation industry and protect taxpayers from misrepresentation, errors and fraud, according to officials with the tax department.Each year, the Department of Taxation and Finance processes more than 10 million individual tax returns, with approximately 70 percent of them completed and filed by paid tax preparers.
“Clearly tax preparers have a huge influence on their clients’ financial well-being,” said Commissioner of Taxation and Finance Thomas H. Mattox in a statement Tuesday. “Accurate tax returns are required to access many financial products and services, including home mortgages and college financial assistance. Prior to New York’s regulations, there was no minimum education standard in place to ensure tax preparers received the training they needed each year to accurately prepare their customers’ tax returns.”
Tax preparers who complete 10 or more New York State personal income tax returns a year are considered “commercial preparers” and must complete continuing education requirements. Experienced commercial preparers take four hours of training while inexperienced commercial preparers take 16 hours. Continuing education requirements include state and federal tax code changes, standards of conduct and other critical topics.
CPAs, attorneys and enrolled agents are subject to the Treasury Department’s Circular 230 professional standards. Therefore they, as well as their supervised employees, are not required to register with the New York State Department of Taxation and Finance or complete the continuing education requirements.
Generally speaking, all other paid tax preparers—including those employed by tax preparation companies—are required to register with New York State.
The tax department also announced Tuesday that 2015 tax preparation registration is now available online atwww.tax.ny.gov.
The tax department has created a searchable database to confirm that a tax prepare has registered with the department if required to do so. An interactive map is also available for locating registered preparers.
New York is one of only four states to regulate the tax preparer industry, the others being California, Oregon and Maryland. The Internal Revenue Service had tried to mandate continuing education and testing for tax preparers nationally as part of its efforts to regulate the tax preparation profession, but a federal judge ruled last year that the IRS had exceeded its statutory authority in imposing the Registered Tax Return Preparer program. After losing an appeal earlier this year, the IRS instead is rolling out a voluntary testing and continuing education program known as the Annual Filing Season program.
For a summary of the regulations in New York State, click here.