New York State fined noncompliant tax preparers nearly $4 million in 2020

Nearly 20 noncompliant tax preparers have paid New York State nearly $4 million in fines during 2020.

Each year, tax-return preparers must register with the state before providing any tax-return preparation services or filing tax returns with the New York State Department of Taxation and Finance, the state agency said in a Tuesday news release.

Those who fail to comply with New York’s registration program may be subject to “steep” monetary penalties or other administrative action.

In all, 19 tax preparers were fined because they didn’t register with New York State, pay the annual registration fee, sign tax returns they prepared, or file returns electronically.

Check your preparer’s credentials

Over 15,000 tax-return preparers have already completed the required education and annual registration application and paid any applicable registration fees. You can verify your preparer’s credentials by asking to see their registration certificate or proof that they don’t need to register. You can also verify that a tax preparer is registered online.

The state monitors tax-preparer activity throughout the year and expects them to adhere to its training requirements “while operating in a professional manner,” the state Taxation and Finance Department said.

In addition to the requirements outlined above, tax preparers must also include their federal preparer tax identification number (PTIN) or Social Security number on tax returns they prepare.

In addition, they must also include either their New York registration number or exclusion code on the tax return, provide a completed copy of the return to the client, review and provide a copy of any disclosure agreements related to the client’s refund, ensure all information submitted is accurate and truthful, and meet continuing-education requirements each year.

If tax preparers fail to register or pay the annual fee, submit 40 income-tax returns without their signature or registration number, fail to electronically file returns, and fail to provide clients with a copy of their returns, the department could assess more than $20,000 in fines.

If you suspect that a tax preparer is engaging in illegal or improper conduct, you can file a complaint with the New York State Department of Taxation and Finance on its website or by calling 518-530-HELP.