HB 1046 Summary

• Requires tax return preparers to obtain and maintain a valid preparer tax identification number (PTIN) issued by the Internal Revenue Service in accordance with federal law.

• Prohibits tax return preparers from preparing returns or claiming refunds for compensation without a valid PTIN, and from omitting the PTIN from returns or refund claims when required by the Department of Taxation.

• Establishes tiered penalties for violations: $100 per violation for the first 100 violations, $500 per violation for violations 101-500, and $1,000 per violation for subsequent violations, with each return or claim for refund counted as a separate violation.

• Allows the director of taxation to waive penalties for reasonable cause, and permits tax return preparers to pay at least 15% of assessed penalties and file refund claims to stay collection actions pending administrative or judicial review.

• Authorizes the director to seek injunctions to prohibit preparers from engaging in prohibited conduct or, for repeated violations, from acting as a tax return preparer; effective upon approval with penalties not applicable until January 1, 2020.