Today's Law As Amended


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AB-1140 Tax preparers: disclosures. (2019-2020)



As Amends the Law Today


SECTION 1.

 Section 22252.2 is added to the Business and Professions Code, to read:

22252.2.
 (a) Before preparing a tax return for a client, a tax preparer shall provide a written disclosure to the client that contains all of the following information:
(1) The costs and fees charged by the tax preparer for usual and customary tax preparation services, including, but not limited to, Form 3514 and Schedule EIC (Form 1040), or subsequent versions of those forms, which shall be itemized and presented in a table format.
(2) A statement that an individual with income below sixty-six thousand dollars ($66,000) may be eligible for free online tax preparation services and an individual with income below fifty-six thousand dollars ($56,000) may be eligible for free in-person tax preparation services through the Internal Revenue Service Volunteer Income Tax Assistance program. The statement shall identify the Internal Revenue Service’s internet websites where an individual may find additional information on each program and the Franchise Tax Board’s CalFile internet website. If the income eligibility threshold for those programs changes in subsequent years, the disclosure shall reflect the updated amount for the current tax year.
(3) The tax preparer’s federal preparer tax identification number.
(b) (1) After preparing a tax return for a client, a tax preparer shall provide a written disclosure to the client that includes all of the following information:
(A) The total cost the client is being charged by the tax preparer.
(B) The tax preparer’s signature.
(C) The date the tax preparer signed the disclosure.
(D) The federal employer identification number.
(E) The tax preparer’s contact information, including, but not limited to, the tax preparer’s name, telephone number, and address.
(F) The tax preparer’s federal preparer tax identification number.
(2) The written disclosure shall include the information required in subparagraphs (E) and (F) for each tax preparer who worked on the tax return.
(c) The disclosures required by this section shall be provided on paper, shall be clearly legible in not less than 12-point type, and shall be signed and dated by the client. The tax preparer shall retain the documents for at least three years.
(d) The written disclosures required to be provided in this section shall be made available in English and the five languages listed in Section 1632 of the Civil Code.
(e) The Franchise Tax Board shall develop model disclosure forms, which shall be made available on the Franchise Tax Board’s internet website.
(f) (1) A violation of this section is not subject to subdivision (b) of Section 22256 or Section 22257. A tax preparer who violates this section is subject to the following penalties:
(A) For a first violation, the tax preparer is subject to a warning by the Franchise Tax Board.
(B) For a second or subsequent violation, the tax preparer is subject to a fine of seven hundred fifty dollars ($750) and discipline by the Franchise Tax Board consistent with the provisions of this act.
(2) Moneys collected by the Franchise Tax Board pursuant to this section shall, upon appropriation by the Legislature, be used to fund the federal Volunteer Income Tax Assistance (VITA) program and Earned Income Tax Credit outreach efforts.
(3) The Franchise Tax Board shall notify the council of a violation of this section.