N.Y. Comp. Codes R. & Regs. Tit. 20 §§ 2600-5.1

Current through Register Vol. 46, No. 50, December 11, 2024

Section 2600-5.1 - Sanctionable conduct

Incompetence and disreputable conduct for which a tax return preparer may be sanctioned includes, but is not limited to:

(a) Criminal convictions. Conviction of any Federal or State criminal offense when there is a direct relationship between the criminal offense or offenses for which the applicant was convicted, or the conduct underlying those offenses, and tax return preparation or tax practice; or when issuance or continuation of the tax return preparer's registration, or continuing to permit the preparer to appear before the department, would involve an unreasonable risk to property, safety or welfare of specific individuals or the general public and the commissioner has given due consideration to the factors set forth in Correction Law, section 753.

(b) Adverse disciplinary actions. Being the subject of any adverse finding, settlement imposing compliance terms, or sanction by any Federal, State or local agency or other disciplinary or licensing organization or board in any administrative action in connection with conduct relating to tax return preparation or tax practice or involving dishonesty or fraud, a violation of trust or of fiduciary obligations, or misuse of confidential information, or the tax return preparer has failed to comply with his or her child support obligations as provided in section 458-b of the Family Court Act, section 244-c of the Domestic Relations Law, or section 3-503 of the General Obligations Law.

(c) False or misleading information or submissions. Giving false or misleading information, or participating in any way in the giving of false or misleading information to the department or any officer or employee thereof, or to any tribunal authorized to pass upon New York State tax matters, in connection with any matter pending or likely to be pending before them, knowing the information to be false or misleading. Facts or other matters contained in testimony, Federal, State or local tax returns, financial statements, applications, registrations, affidavits, declarations, and any other document or statement, written or oral, are included in the term "information."

(d) Willful noncompliance with tax obligations. Willfully failing to comply fully with his or her own Federal, State or local tax obligations in timely fashion, including but not limited to failing to file any required tax return or report, or failing to pay, or make acceptable arrangements to pay, any tax due and owing under the Tax Law or applicable regulations, or willfully and illegally evading, attempting to illegally evade, or participating in any way in illegally evading or attempting to illegally evade any assessment or payment of any Federal, State, or local tax obligation.

(e) Assisting noncompliance or tax evasion. Willfully assisting, counseling, encouraging a client or prospective client in violating, or suggesting to a client or prospective client to violate, any Federal, State, or local tax law, or knowingly counseling or suggesting to a client or prospective client an illegal plan to evade Federal, State, or local taxes or payment thereof.

(f) Misappropriating client funds. Misappropriation of, or failure properly or promptly to remit, funds received from a client for the purpose of payment of taxes or other obligations due the Federal or any state or local government.

(g) Improperly influencing official actions. Directly or indirectly attempting to influence, or offering or agreeing to attempt to influence, the official action of any officer or employee of the department by the use of threats, false accusations, duress or coercion, by the offer of any special inducement or promise of an advantage or by the bestowing of any gift, favor or thing of value.

(h) Aiding practice by non-registered preparers. Hiring, employing or otherwise aiding and abetting another person to engage in the practice of tax return preparation, when the preparer knew, or should have known, that such other person was not registered as a tax return preparer in a jurisdiction in which such person was legally required to be registered or when that person's registration as a tax return preparer has been suspended or cancelled.

(i) Contemptuous conduct. Engaging in contemptuous conduct in connection with a return prepared by the preparer or in practice before the department regarding that return, including the use of abusive language, making false accusations or statements to the department, knowing them to be false, or circulating or publishing malicious or libelous matter.

(j) False and misleading opinions. Giving a false opinion, knowingly, recklessly, or through gross incompetence, including an opinion which is intentionally or recklessly misleading, or engaging in a pattern of providing incompetent opinions on questions arising under Federal, State, or local tax laws. False opinions described in this subdivision include those which reflect or result from a knowing misstatement of fact or law, from an assertion of a position known to be unwarranted under existing law, from counseling or assisting in conduct known to be illegal or fraudulent, from concealing matters required by law to be revealed, or from consciously disregarding information indicating that material facts expressed in the opinion or offering material are false or misleading.

(k) Willful failure to sign a return. Willfully failing to sign a tax return prepared by the preparer when the preparer's signature is required by Federal, State or local tax laws unless the failure is due to reasonable cause and not due to willful neglect.

(l) Disclosure of confidential information. Willfully or recklessly disclosing or otherwise using a tax return or tax return information in a manner not authorized by Federal or State law or otherwise disclosing confidential information obtained in the course of a professional engagement unless such disclosure was with the consent of the client, in the course of dealing with tax authority, as required by law, or otherwise permitted under relevant professional standards.

(m) Willful violation of the law. Willfully violating, or conspiring with or aiding or counseling another to violate any provision of the Tax Law or any regulation promulgated by the commissioner or any other applicable law or regulation governing the conduct of tax return preparers in New York, including, as applicable, the provisions of section 372 of the General Business Law regarding the Consumer Bill of Rights Regarding Tax Preparers.

(n) Failure to register, pay required fee, or complete educational requirements. If required by law, failing to register timely as a tax preparer, pay the tax preparer registration fee, or complete any educational requirements imposed on such individuals in New York.

(o) False or misleading representations. Willfully using false or misleading representations to procure employment or intimating that the preparer is able to improperly obtain special consideration or action from the department or any officer or employee thereof.

N.Y. Comp. Codes R. & Regs. Tit. 20 §§ 2600-5.1