New NYS Legislation for Tax Preparers

[WhiteOleander]

I thought Texas was a republic?

True. But, haven't you ever heard the delegates introduced at the political conventions? They all start out "From the Great State Of Texas"........

Seriously, I really don't see how NY can pass a law that affects me from another state. I have no representation there through any elected official. They have no jurisdiction over me. If this were true, they could also pass a law that says if I watch the David Letterman show, I need to register and pay an entertainment fee if watch more than 10 episodes. They produce the Letterman show there and need to recoup some of the expense. No?

[Corduroy Frog]

No Nonresident can vote

If someone works in New York (or 42 other states) and lives in Texas, they have to file a non-resident tax return for that state. The Texas resident clearly has no representation, cannot vote, etc.

In my 40+ years of driving, I have nine moving violations. 56% of them (five) are from states other than Tennessee, yet 90% of my driving over these years has been in TN. Do you think there is a bias in "revenue enhancements" a.k.a. speed traps...

It is immensely popular to suck revenue out of people who have no voting rights, or who know no influential politicians in-state, etc. Home-cooking tax jurisdictions look at this as "free money" with no downside.

Oleander, if you are ever in TN with TX tags, I would like to promise you that our troopers will be keep you safe on our highways and be as equally prone to give tickets to home-town people as to you. Sorry, lady -- greed is alive and well in our state too.

[S T]

Jurisdiction

My take and I probably won't explain it well, but here goes.

I am an Enrolled Agent, so my license is Federal and most States Recognize, so I have always prepared tax returns in "All States" without any Individual State Licensing

As I understand it CPA's and Attorneys basically have to meet their "Resident" State Licensing Requirements , but then most other States will allow them to file a "limited" number of State Returns without becoming licensed to practice in that State

Tax Preparers - Some are licensed by their Resident State and then again Some are not - and I believe this is where now the Registration Procedures that are being introduced is trying to "tighten up"- Limitation of Tax Preparer's without Professional Licensing outside of their State Juridication.

White Oleander, I was concerned as well - as I prepare "under 10 returns" in New York State each year - but it does seem that NY has made the provision - we simply have to register "without" a fee.

So for now, I am guessing that as long as we are an Enrolled Agent, A CPA or Attorney with an "Active License" or a Tax Preparer that has met their "own State Requirements" we are good for now!

We simply have to submit another registration form with our qualifications.

I have to do this with my Insurance License - obtain another registration from State to State to be able to practice in that State. It is what is called Resident and Non-Resident Licensing. Only one State at a time holds the Resident License (State I reside) and then all other States are non-resident Licensing and look to my Resident State to "make sure that I have met the minimum requirements and have no infractions/complaints"

Sandy

[Lion]

11

I'm bummed because I prepared 11 NY returns last year, so they'll be looking for my $100. But, I expect to prepare no more than nine next season, because some of my clients stopped commuting to NY during 2008.

NY wants NY withholding from telecommuters who never set foot in the state but telecommute for a NY business. And, from the employees working in CT who might attend a meeting in NY with their company. And, don't get me started on partnerships having to pay NY tax on behalf of their non-resident partners. I think that one died out in NY, but now CT's mimicking it.

[BOB W]

I'm bummed because I prepared 11 NY returns last year, so they'll be looking for my $100. But, I expect to prepare no more than nine next season, because some of my clients stopped commuting to NY during 2008.

NY wants NY withholding from telecommuters who never set foot in the state but telecommute for a NY business. And, from the employees working in CT who might attend a meeting in NY with their company. And, don't get me started on partnerships having to pay NY tax on behalf of their non-resident partners. I think that one died out in NY, but now CT's mimicking it.

I guess once you get to 10 or more NY returns, tacking on $10 each doesn't seem like a client changer.

[Bees Knees]

Seriously, I really don't see how NY can pass a law that affects me from another state. I have no representation there through any elected official. They have no jurisdiction over me. If this were true, they could also pass a law that says if I watch the David Letterman show, I need to register and pay an entertainment fee if watch more than 10 episodes. They produce the Letterman show there and need to recoup some of the expense. No?

States certainly have the authority to regulate how their own state income taxes are prepared, and by whom.

Does that mean they are going to send a state trooper to Texas and arrest you for ignoring their laws? No. Will they file a civil action suit and sue you in state court, forcing you to come to NY to defend yourself? Not for $100. There is probably no teeth to this law. On the other hand, I wouldn’t want to be visiting NY 5 years from now and find out there is an outstanding warrant for my arrest for things like unpaid parking tickets or unpaid tax preparer registration permits.


BTW: Minnesota DOES issue arrest warrants for unpaid parking tickets.

[Uncle Sam]

New NYS Legislation

This is only speculation on my part - but I believe that the fee is not what NYS is really after.
Yes - NYS has a budget crisis and is looking for every opportunity to raise money - but
I feel that what's behind this is really to have control over the current unregulated, unlicensed, and in many cases unscrupulous tax return preparers who up to now have had no regulation at all.

[BOB W]

This is only speculation on my part - but I believe that the fee is not what NYS is really after.
Yes - NYS has a budget crisis and is looking for every opportunity to raise money - but
I feel that what's behind this is really to have control over the current unregulated, unlicensed, and in many cases unscrupulous tax return preparers who up to now have had no regulation at all.

Sam> I think you are right in all your comments, but why aren't EAs included under you logic. This is just another case of EAs being marked as a 2nd class preparer. It is just not right. We are a controlled group, nationally.

[AuditorTurnedGood]

BTW: Minnesota DOES issue arrest warrants for unpaid parking tickets.

Yes, and if you skip your court date in certain traffic-related cases, they'll swear out a bench warrant for your arrest. Not that I know this from any personal experience - I showed up to my hearing.

ATG

[FEDUKE404]

NY just getting greedy?

Most folks on these boards prepare "more than ten returns."

Therefore, does the first NY return incur the fee, or instead the eleventh NY return??

(The only exposure I've had to NY state/city returns is either non-resident income or part-year resident income.)

If I'm going to get hit with a $100 fee, especially a recurring one, for preparing a single NY return then I will out of necessity have to steer that client elsewhere.

At least the "file your own" approach is available for the NY return, but that could open up an entirely separate can of worms.....

FE

[Jesse]

Most folks on these boards prepare "more than ten returns."

Therefore, does the first NY return incur the fee, or instead the eleventh NY return??

FE

The way I understand it, the tenth return would incur the fee, although the first would require registration.

Don Priebe's post clarified this and here is the link to New York State Dept of Taxation and Finance: http://www.tax.state.ny.us/tp/tpreg.htm

And of course UncleSam's link to the actual Memo has more detail.

I had only one NY non-resident return last year so thank you Uncle Sam for pointing this out, if I do have another in 2010 I would have never known.

[dtlee]

The way I understand it, the tenth return would incur the fee, although the first would require registration.

Don Priebe's post clarified this and here is the link to New York State Dept of Taxation and Finance: http://www.tax.state.ny.us/tp/tpreg.htm

And of course UncleSam's link to the actual Memo has more detail.

I had only one NY non-resident return last year so thank you Uncle Sam for pointing this out, if I do have another in 2010 I would have never known.

My understanding (or "wild guess" is perhaps a better phrase) is that if you are going to prepare at least one New York State return on or after 12/31/2009, you must be registered. At that time, if you prepared at least 10 returns in 2009 you must pay the fee at the time of registration because you already meet the definition of a "commercial tax preparer." If you did not file at least 10 returns during 2009 but somehow know you will be filing at least 10 returns in 2010, you would also be subject to the $100 fee.

Their wording seems to imply that if you did not know at the time of registration that you would be filing 10 returns in 2010 and did not file 10 returns or more during 2009, you would not have to pay a fee at that time. However, I would think you would have to find a way to amend your registration and pay the fee once you have filed 9 New York returns and know you are preparing a 10th one.

Apparently, you are not required to register is if you are not going to file any New York State returns in 2010 even if you did prepare more than 9 in 2009. The only time you can register and not pay a fee is if fewer than 10 New York returns were prepared/will be prepared by you both in 2009 and in 2010.

None of the above should be interpreted as me either supporting or feeling I have an understanding of the law any more than any other poster on this board.

[FEDUKE404]

NY language is unclear

The way I understand it, the tenth return would incur the fee, although the first would require registration.

Don Priebe's post clarified this and here is the link to New York State Dept of Taxation and Finance: http://www.tax.state.ny.us/tp/tpreg.htm

And of course UncleSam's link to the actual Memo has more detail.

I had only one NY non-resident return last year so thank you Uncle Sam for pointing this out, if I do have another in 2010 I would have never known.

Jesse -

I know at times I'm kinda slow but the following, taken from the link you provided, is terribly unclear re the 2010 requirements (there is NO "New York State" mentioned in that area).

If they really mean 10 or more New York State tax returns for 2010, then I should be home free. Also, it should be noted they talk about "prepared in" and not "for" the respective calendar years.

FWIW: Several years ago I encountered a related problem trying to efile a part-year resident tax return for Illinois. No fees involved, but I had to provide them background proof of my ERO status.

FE


Generally, you must register if you do one or both 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.

[dtlee]

Jesse -

I know at times I'm kinda slow but the following, taken from the link you provided, is terribly unclear re the 2010 requirements (there is NO "New York State" mentioned in that area).

If they really mean 10 or more New York State tax returns for 2010, then I should be home free. Also, it should be noted they talk about "prepared in" and not "for" the respective calendar years.

FWIW: Several years ago I encountered a related problem trying to efile a part-year resident tax return for Illinois. No fees involved, but I had to provide them background proof of my ERO status.

FE


Generally, you must register if you do one or both 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.

In the actual law itself it defines a "commercial tax return preparer" as one who prepares 10 or more returns for a fee for the current or prior calendar year (either in 2009 or 2010 for this upcoming season). Separately, it says that a "return" is "a return or report relating to a tax administered by the commissioner." The commissioner is responsible for New York State returns only. I believe that means that when counting "returns" you would not limit it to income tax returns, but it is definitely confined to New York State filings.

[Edsel]

Already Paying

Bob, it could be because [choose one]

1. Attorneys and CPAs are godlike beings and the whole public knows it, whereas EAs don't get any respect and NONE of the public knows us. (There have been several posts where EAs need to actually undergo a name change so the public doesn't think we work for the IRS)

2. Attorneys and CPAs already pay a heavy fee to NY for the privelege of doing business there and EAs have been getting off the hook for lo these many years.

Take your pick. If you are a NY CPA you might have a different perspective than an EA.