The New York State (NYS) Department of Taxation and Finance has plans to regulate tax return preparers by amending its Personal Income Tax Regulations and Procedural Regulations. Perhaps in reaction to the demise of the IRS’s registered tax return preparer program in federal court, NYS proposes to regulate all commercial tax return preparers – including prohibiting persons who have violated laws or “engaged in any dishonest or unscrupulous behavior” from becoming preparers. The proposed regulations would also require competency exams, continuing professional education and due diligence in the accuracy of return preparation. The good news for CPAs is that the underlying New York statue that authorizes tax preparer regulations exempts CPAs. Here’s a link to an article in The Tax Advisor with more information.
New York is not the only state that regulates tax return preparers; California, Oregon and Maryland also require preparers to meet minimum qualifications, take an exam and complete continuing professional education. Both Oregon and Maryland exempt CPAs from the requirements as New York does, but California only exempts California CPAs. That means CPAs in other states that prepare California tax returns must either be registered with the California State Board of Accountancy or register as a tax preparer with the California Tax Education Council.