New NYS Legislation for Tax Preparers

[BOB W]

If you complete a paper return without preparer info AND have the client sign an "OPTOUT" form (opting out of electronically filing), any preparer can fill in his/her info.

Don't get me wrong, there is a lot to think about someone doing this for another preparer and what issues are at risk. But, I guess if the NY preparer is used to verify that the NY return was done properly he/she could sign off as the preparer..???

Most tax programs have the ability to remove preparer info (for non paid returns). One would have to print the NYS return first, then reset the return for federal printing.

The NY return would have to be sent to the NY preparer with the "OPTOUT" form. Then the NY preparer would have to send the NY return back to you and you have the NY return signed by the client and mailed. The NY preparer would keep the "OPTOUT" form.

[WhiteOleander]

I'm sorry to keep asking the question, but NY has no jurisdiction over me in TX. Why do they think I am subject to their laws? They can't impose a fee on me if I have no connection to NY.

I don't have to meet the requirements for CA or OR. So why NY?

[BOB W]

I read the legislation and cannot find any exceptions. Like I said earlier, If they send you a notice for not having a NYS preparer number on the NYS tax return, you have 90 days to correct the problem. Send them $100 with your registration, but don't fail to register next year and file a NYS tax return. What can they do when they issue a penalty and try to collect it, I DON"T KNOW. Probably send the tax return back to the client for being an incomplete return. That is, for the second time a non registered preparer file a return for that client.

[DonPriebe]

Check the limits again

You have to read the rules carefully ...

"Return means a return or report relating to a tax administered by the Tax Department."
(So only NYS returns are counted as returns.)

"Commercial tax return preparer means a tax return preparer who:
• prepared ten or more returns for compensation in the preceding calendar year, and will
prepare at least one return for compensation during the current calendar year; or

• prepared fewer than ten returns for compensation in the preceding calendar year, but
will prepare ten or more returns for compensation during the current calendar year."
(So if you have only a few NY clients, you aren't a commercial tax return preparer.)

"Each tax return preparer, as defined above, who will prepare at least one return in a
calendar year must register electronically with the Tax Department for that calendar year." (Yes, you have to register.)

"No fee is required for a tax return preparer who does not meet the thresholds set in the
definition of a commercial tax return preparer."

So a preparer with only a handful of NY clients must REGISTER, but does not have to pay the fee.

[BOB W]

You have to read the rules carefully ...

"Return means a return or report relating to a tax administered by the Tax Department."
(So only NYS returns are counted as returns.)

"Commercial tax return preparer means a tax return preparer who:
• prepared ten or more returns for compensation in the preceding calendar year, and will
prepare at least one return for compensation during the current calendar year; or

• prepared fewer than ten returns for compensation in the preceding calendar year, but
will prepare ten or more returns for compensation during the current calendar year."

(So if you have only a few NY clients, you aren't a commercial tax return preparer.)

AH....so ST has no problem with her 3 or 4 return..... I remember reading that area but didn't read the OR properly.

Don>> good update on your post >>>REGISTRATION is required but no fee required.

[erchess]

What am I missing here?

If I charge the client for a Federal Return and a NC Return but waive the fee for NY can I not avoid signing NY and therefore avoid this problem? I realize they would have to paper file and do the opt out thing and I realize that I would have to redact the NY return my software kicked out. I already would not take on a client who the following year expects to need a state other than one of the three I do regularly. The only time I do a return other than NC SC or TN is if someone moved from another area and needs to file one last return with the old home state.

[Kram BergGold]

A few things

First, if you prepare under 10 returns you do not have to pay the $100 fee. Check ou the NY website.
Second, I was told that the law was changed and that EA's do not have to pay the fee. Is this accurate, and are non NY EA's treated the same as NY EA's?

[DonPriebe]

... I was told that the law was changed and that EA's do not have to pay the fee. Is this accurate, and are non NY EA's treated the same as NY EA's?

As of today (10/4) the website still says that EA's pay. If there was a change they still have almost a month to let us know -- registration is scheduled to start in November.

[JoshinNC]

Why do you turn away business?

If I charge the client for a Federal Return and a NC Return but waive the fee for NY can I not avoid signing NY and therefore avoid this problem? I realize they would have to paper file and do the opt out thing and I realize that I would have to redact the NY return my software kicked out. I already would not take on a client who the following year expects to need a state other than one of the three I do regularly. The only time I do a return other than NC SC or TN is if someone moved from another area and needs to file one last return with the old home state.

Just because a client might have a rental in CA or an LLC interest in NY? That's assinine, in my opinion. I'm only 45 minutes from you, so you can send them my way. I'll be more than happy to do the extra states, and charge accordingly to do so.

[erchess]

ummmm Josh

Just because a client might have a rental in CA or an LLC interest in NY? That's assinine, in my opinion. I'm only 45 minutes from you, so you can send them my way. I'll be more than happy to do the extra states, and charge accordingly to do so.

I'm near Asheville which I would actually pass through on my way to you. Greensboro, which is on the way, is 2.5 hours away. Thank you for the offer though.

[DaveO]

I can't see where it says the 10 returns must be New York returns. As I read it if you prepare 9 returns for another state and 1 NYS return you must be registered to file that 1 NYS return. I only have a couple of NYS returns I do but I may seek some clarification on this point.

[New York Enrolled Agent]

I can't see where it says the 10 returns must be New York returns. As I read it if you prepare 9 returns for another state and 1 NYS return you must be registered to file that 1 NYS return. I only have a couple of NYS returns I do but I may seek some clarification on this point.

From the NY tax memo cited in the original post:

Return means a return or report relating to a tax administered by the Tax Department.

I infer that means NYS tax returns or reports and is the basis for the next three sentences.

If you do one return, NYS says you must be registered. If you do 10 or more returns, you must be registered and additionally pay the $100 fee. Based on my understanding and your post, you would need to register but not pay the fee.

[DaveO]

Thanks NY EA

When I went to register I saw the site won't be up until November and an annual renewal will be required. All my NYS returns are from people who moved there or referalls. I'll just make sure to keep it under 10.

[DonPriebe]

Update - Out-of-state CPAs

Second, I was told that the law was changed and that EA's do not have to pay the fee. Is this accurate, and are non NY EA's treated the same as NY EA's?

A bill was introduced last May in the assembly (A8556) that would treat NY and non-NY CPAs equally in regard to registration and payment of fees. Apparently it is still in the legislative process.

It does not affect EAs.

http://assembly.state.ny.us/leg/?bn=A08556

[Davc]

Just a point to be made. But, I don't think I am under the jurisdiction of NY state. I am subject to the laws of my state, Texas. True?

I thought Texas was a republic?