Provides for penalties for tax preparers that purposefully mislead their clients or act as ghost preparers of tax returns.
Impact
The bill establishes civil penalties for tax return preparers who mislead clients or circumvent tax laws, with financial repercussions tied to each infraction. If a tax return preparer is found to have willfully prepared fraudulent returns, they could face significant fines of up to $1,000 per infraction. In more severe cases, repeat offenders may incur penalties ranging from $5,000 to $10,000, depending on whether their privileges have been suspended or revoked previously. The legislation aims to protect taxpayers from fraudulent practices and enhance the integrity of the tax preparation process within the state.
Summary
Bill S2810 seeks to amend the Tax Preparers Act of 2013 by addressing issues related to tax return preparers, particularly focusing on regulations against 'ghost preparers'—those who fail to identify themselves on the returns they prepare. The bill introduces new definitions and sets forth obligations for tax return preparers, ensuring they comply with state laws and include their Preparer Tax Identification Number (PTIN) on all filed returns. Moreover, it mandates that preparation of tax returns by ghost preparers is expressly prohibited.
Contention
While supporters assert that the bill is a necessary step to enhance accountability and protect consumers, there could be concerns raised around the practical implications of increased regulation on tax preparers. Small tax preparation businesses may argue that the burden of compliance could stifle their operations, particularly if penalties are perceived as overreaching or if the definition of compliance is not clearly articulated. There may also be discussions regarding the adequacy of resources provided to the Department of Taxation to effectively implement and enforce these new regulations.
Authorizes a retroactive tax credit for tax yr 2026/thereafter/allowing investment tax credits to be passed through to the personal income tax returns of eligible Sub-S corporation shareholders/limited liability company members who meet certain conditions
Removes the exemption from the state hotel tax for residences rented in their entirety on a hosting platform on or after January 1, 2026, for a period of thirty (30) nights or less.
Increases the LLC organization fee to $500. Exempts the LLC from filing an annual tax return, paying the minimum tax and obtaining a letter of good standing from the division of taxation in order to dissolve.
Exempts certain urban and small farmers from sales taxes, real, tangible and personal property taxes and income taxes. This act would also define urban and small farmers and urban farmland.