SENATE BILL No. 269

 

 

April 16, 2019, Introduced by Senators GEISS, HOLLIER, ALEXANDER, BULLOCK, LUCIDO, ANANICH, CHANG and POLEHANKI and referred to the Committee on Finance.

 

 

 

     A bill to amend 1941 PA 122, entitled

 

"An act to establish the revenue collection duties of the

department of treasury; to prescribe its powers and duties as the

revenue collection agency of this state; to prescribe certain

powers and duties of the state treasurer; to establish the

collection duties of certain other state departments for money or

accounts owed to this state; to regulate the importation, stamping,

and disposition of certain tobacco products; to provide for the

transfer of powers and duties now vested in certain other state

boards, commissions, departments, and offices; to prescribe certain

duties of and require certain reports from the department of

treasury; to provide procedures for the payment, administration,

audit, assessment, levy of interests or penalties on, and appeals

of taxes and tax liability; to prescribe its powers and duties if

an agreement to act as agent for a city to administer, collect, and

enforce the city income tax act on behalf of a city is entered into

with any city; to provide an appropriation; to abolish the state

board of tax administration; to prescribe penalties and provide

remedies; and to declare the effect of this act,"

 

(MCL 205.1 to 205.31) by adding section 4a.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 


     Sec. 4a. (1) Beginning January 1, 2020, any return or claim

 

for refund prepared by a paid tax preparer shall be signed by the

 

paid tax preparer and shall bear the paid tax preparer's tax

 

identification number.

 

     (2) In addition to any other penalty provided by law, any

 

person who is a paid tax preparer with respect to any return or

 

claim for refund who fails to sign the return or claim for refund

 

and to provide their preparer tax identification number as required

 

by this section shall pay a civil penalty of $50.00 for each

 

failure, unless it can be shown that the failure was due to

 

reasonable cause as determined by the department. The civil penalty

 

imposed on any paid tax preparer with respect to returns or claims

 

for refund filed during any calendar year shall not exceed

 

$25,000.00. The department may use an amount equal to the total

 

penalties collected under this section to regulate paid tax

 

preparers.

 

     (3) A paid tax preparer shall not do any of the following:

 

     (a) Prepare any return or claim for refund that includes an

 

understatement of a taxpayer's liability due to an unreasonable

 

position.

 

     (b) Prepare any return or claim for refund that includes an

 

understatement of a taxpayer's liability due to willful or reckless

 

conduct.

 

     (c) Where required, do any of the following:

 

     (i) Fail to furnish a copy of a return or claim for refund.

 

     (ii) Fail to sign a return or claim for refund.

 

     (iii) Fail to furnish an identifying number.


     (iv) Fail to retain a copy of records.

 

     (v) Fail to file correct information returns.

 

     (vi) Fail to determine eligibility for tax benefits.

 

     (d) Negotiate a check issued to a taxpayer by the department

 

without the permission of the taxpayer.

 

     (e) Engage in any conduct subject to any criminal penalty

 

provided in this act.

 

     (f) Misrepresent the paid tax preparer's eligibility to

 

practice before the department or otherwise misrepresent the paid

 

tax preparer's experience or education.

 

     (g) Guarantee the payment of any tax refund or the allowance

 

of any tax credit.

 

     (h) Engage in any other fraudulent or deceptive conduct that

 

substantially interferes with the proper administration of the tax

 

laws of this state.

 

     (4) In a court of competent jurisdiction, the department may

 

commence suit to enjoin any paid tax preparer from further engaging

 

in any conduct described in this section or from further acting as

 

a paid tax preparer. If the court issues an injunction under this

 

section, the paid tax preparer shall reimburse the department for

 

all costs and fees incurred in prosecuting the case.

 

     (5) If the court finds that a paid tax preparer has

 

continually or repeatedly engaged in any conduct prohibited in this

 

section and that an injunction prohibiting the conduct would not be

 

sufficient to prevent the person's interference with the proper

 

administration of the tax laws of this state, the court may enjoin

 

the person from acting as a paid tax preparer in this state. The


fact that a person has been enjoined from preparing tax returns or

 

claims for refund for the United States or any other state, in the

 

5 years preceding the petition for an injunction, shall establish a

 

prima facie case for an injunction to be issued pursuant to this

 

section.

 

     (6) This section shall be known and may be cited as the

 

"taxpayer protection act".

 

     (7) As used in this section:

 

     (a) "Paid tax preparer" means any person who prepares for

 

compensation, or who employs 1 or more persons to prepare for

 

compensation, any return or claim for refund, or a substantial

 

portion of any return or claim for refund under this act. However,

 

a paid tax preparer does not include any of the following:

 

     (i) An individual who is licensed as a certified public

 

accountant under article 7 of the occupational code, 1980 PA 299,

 

MCL 339.720 to 339.736.

 

     (ii) An individual whose principal place of business is not in

 

this state and who satisfies the requirements set forth in section

 

727a of the occupational code, 1980 PA 299, MCL 339.727a.

 

     (iii) An individual who is employed by a firm that is licensed

 

under article 7 of the occupational code, 1980 PA 299, MCL 339.720

 

to 339.736, or exempt from licensure under section 728(4) or (5) of

 

the occupational code, 1980 PA 299, MCL 339.728, and who prepares a

 

return under the supervision of an individual described in

 

subparagraph (i) or (ii).

 

     (iv) An individual who prepares a return as a volunteer

 

through a nonprofit organization or other organization offering tax


assistance.

 

     (b) "State" means a state of the United States, the District

 

of Columbia, Puerto Rico, the United States Virgin Islands, or any

 

territory or insular possession subject to the jurisdiction of the

 

United States.