99TH GENERAL ASSEMBLY
State of Illinois
2015 and 2016
HB3631

 

Introduced , by Rep. Marcus C. Evans, Jr.

 

SYNOPSIS AS INTRODUCED:
 
New Act

    Creates the Tax Preparer Consumer Bill of Rights Act. Provides that a tax preparer shall post an identification and qualification statement on his or her business premises and shall provide the customer with a receipt containing an address and phone number at which the preparer can be contacted throughout the year. Requires the Department of Revenue to publish a consumer bill of rights regarding tax preparers in a newspaper of general circulation in the State. Provides that tax preparers must provide certain disclosures concerning refund anticipation loans. Provides that tax preparers may not engage in certain practices, including, but not limited to, asking a taxpayer to sign a blank or incomplete tax return, misstating the tax preparer's qualifications, charging a fee based upon the amount of tax owed or refund due, and making deceptive statements. Sets forth certain requirements for tax preparers. Contains provisions concerning penalties. Contains other provisions. Effective immediately.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB3631LRB099 08842 HLH 29014 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 1. Short title. This Act may be cited as the Tax
5Preparer Consumer Bill of Rights Act.
 
6    Section 5. Definitions. As used in this Act:
7    "Department" means the Department of Revenue.
8    "Refund anticipation loan" means any loan a taxpayer may
9receive against his or her anticipated income tax refund.
10    "Tax preparer" or "preparer" means a person, partnership,
11corporation, or other business entity, that, for valuable
12consideration, advises or assists or offers to advise or assist
13in the preparation of income tax returns for another.
 
14    Section 10. Disclosure.
15    (a) A tax preparer who is required, pursuant to federal or
16State law, rule, or regulation, to sign income tax returns as a
17preparer shall prominently and conspicuously post on the
18business premises an identification and qualification
19statement. The statement shall include, but is not limited to,
20the name of the tax preparer, an address and phone number at
21which the tax preparer can be contacted throughout the year,
22and a statement of any qualifications possessed by the tax

 

 

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1preparer, which may include a statement of satisfactory
2completion of an educational or training program in income tax
3law, theory, or practice by the preparer. The statement shall
4be displayed at the public entrance to the tax preparer's
5business premises or in the immediate area where consumers
6arrive and are met for business purposes by the tax preparer.
7    (b) Except as otherwise provided in this Section, the sign
8shall be composed of proportionately spaced, upper-case black
9characters, sans serif, at least one-half inch high on a white
10background.
11    (c) The heading "IDENTIFICATION AND QUALIFICATIONS OF TAX
12PREPARER" shall appear at the top and center of the sign.
13Subsequent lines shall begin at the left-hand margin of the
14sign. The first line beneath the heading shall state the full
15name of the tax preparer. The second and third lines shall
16state the address at which the tax preparer may be contacted
17throughout the year. The fourth line shall state the telephone
18number at which the tax preparer may generally be contacted
19throughout the year during business hours. The fifth line shall
20begin with the caption "QUALIFICATIONS:" and be followed by a
21statement of the tax preparer's relevant training and
22experience. Such statement may consist of characters
23one-quarter inch high.
24    (d) A partnership, corporation, or other business entity
25operating as a tax preparer may satisfy the disclosure
26requirements of this Section by posting one sign, containing

 

 

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1its name, address, and phone number as set forth above, and a
2statement of the minimum qualifications possessed by all
3individuals who prepare or assist in the preparation of tax
4returns as an agent or employee of the partnership,
5corporation, or other business entity.
6    (e) The sign shall not contain language which falsely
7indicates that a tax preparer is licensed or in any manner
8approved or authorized to do business by the State.
9    (f) In addition, the tax preparer shall provide the
10customer with a receipt containing an address and phone number
11at which the preparer can be contacted throughout the year.
 
12    Section 15. Consumer bill of rights; notice. No later than
13the fifteenth of October of each year, the Department shall
14publish in a newspaper of general circulation in the State a
15statement of consumers' rights and laws concerning tax
16preparers to be called a "consumer bill of rights regarding tax
17preparers". The notice shall contain the following
18information:
19        (1) postings required by local, State, and federal
20    laws, such as price posting, posting of qualifications, and
21    any licenses and permits required for the operation of the
22    business;
23        (2) explanations of some of the commonly offered
24    services and industry jargon, such as preparation of short
25    and long federal forms, refund, electronic filing, express

 

 

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1    mail, direct deposit, refund anticipation loan, "quick",
2    "instant", "rapid", "fast", fee, and interest;
3        (3) basic information on what a tax preparer is and is
4    not required to do for a consumer, such as the preparer's
5    responsibility to sign a return, and that a tax preparer
6    may not be required to accompany a consumer to an audit;
7        (4) the telephone numbers of the Department for
8    information and complaints; and
9        (5) a statement listing the types of information that
10    the consumer has the right to receive from the tax preparer
11    prior to becoming obligated to compensate the tax preparer
12    for services rendered in connection with filing the
13    consumer's income tax return with the appropriate
14    governmental agencies.
15    In addition, the Department shall provide a copy of the
16consumer bill of rights regarding tax preparers to any
17requesting individuals or businesses within 14 days of such a
18request.
 
19    Section 20. Records. No tax preparer shall intentionally
20misstate or misrepresent any information relating to his or her
21education, training, or experience on an identification and
22qualification statement. A tax preparer shall maintain records
23to substantiate all of the information contained on such a
24statement; provided, however, that an affidavit signed by the
25tax preparer indicating that the information contained on a

 

 

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1statement is true shall be sufficient to substantiate any
2information if other records are not available. Such records,
3affidavit, or both shall be kept on file on the business
4premises and shall be presented on demand for inspection by the
5commissioner.
 
6    Section 25. Refund anticipation loans. Any tax preparer who
7advertises the availability of a refund anticipation loan may
8not directly or indirectly represent such a loan as a refund.
9Any advertisement which mentions a refund anticipation loan
10must state conspicuously that it is a loan and that a fee or
11interest will be charged by the lending institution. The
12advertisement must also disclose the name of the lending
13institution.
14    Before any taxpayer enters into a refund anticipation loan,
15the tax preparer facilitating the loan shall provide the
16following disclosure to the taxpayer in writing, in English and
17Spanish, in at least 14-point type. In the event that the
18taxpayer does not understand English or Spanish, the tax
19preparer shall also provide a point-by-point oral explanation
20of the following required disclosure in a language understood
21by the taxpayer:
22    "YOU ARE NOT REQUIRED TO ENTER INTO THIS REFUND
23ANTICIPATION LOAN AGREEMENT MERELY BECAUSE YOU HAVE RECEIVED
24THIS INFORMATION.
25    IF YOU DO SIGN A CONTRACT FOR A REFUND ANTICIPATION LOAN,

 

 

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1YOU WILL BE TAKING OUT A LOAN. YOU WILL BE RESPONSIBLE FOR
2REPAYMENT OF THE ENTIRE LOAN AMOUNT AND ALL RELATED COSTS AND
3FEES, REGARDLESS OF HOW MUCH MONEY YOU ACTUALLY RECEIVE IN YOUR
4TAX REFUND.
5    IF YOU DO NOT TAKE OUT THIS REFUND ANTICIPATION LOAN, YOU
6ARE ELIGIBLE TO RECEIVE A GROSS TAX REFUND OF APPROXIMATELY
7$(insert amount).
8    IF YOU DO TAKE OUT THIS REFUND ANTICIPATION LOAN, YOU WILL
9BE RESPONSIBLE TO PAY $(insert amount) IN FEES FOR THE LOAN.
10AFTER THESE FEES ARE PAID, YOU WILL RECEIVE APPROXIMATELY
11$(insert amount) AS YOUR LOAN.
12    THE ESTIMATED ANNUAL PERCENTAGE RATE OF YOUR REFUND
13ANTICIPATION LOAN IS (insert percentage). THIS IS BASED ON THE
14ACTUAL AMOUNT OF TIME YOU WILL BE LENT MONEY THROUGH THIS
15REFUND ANTICIPATION LOAN.
16    IF YOU DO TAKE OUT THIS REFUND ANTICIPATION LOAN, YOU CAN
17EXPECT TO RECEIVE YOUR LOAN ON (insert date).
18    IF YOU DO NOT TAKE OUT THIS REFUND ANTICIPATION LOAN, YOU
19CAN STILL RECEIVE YOUR TAX REFUND QUICKLY. IF YOU FILE YOUR TAX
20RETURN ELECTRONICALLY AND RECEIVE YOUR TAX REFUND THROUGH THE
21MAIL, YOU CAN EXPECT TO RECEIVE YOUR REFUND ON (insert date).
22IF YOU FILE YOUR TAX RETURN ELECTRONICALLY AND HAVE YOUR TAX
23REFUND DIRECTLY DEPOSITED INTO A BANK ACCOUNT, YOU CAN EXPECT
24TO RECEIVE YOUR REFUND ON (insert date).".
25    It shall be the obligation of the tax preparer to complete
26the required disclosure accurately with all relevant

 

 

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1information for each taxpayer, to provide the required
2point-by-point oral explanation when necessary, and to ensure
3that the completed disclosure form is signed by the taxpayer
4before he or she enters into a refund anticipation loan.
5    Any person claiming to be injured by the failure of a tax
6preparer to act in accordance with this Section shall have a
7cause of action against such tax preparer in any court of
8competent jurisdiction for any or all of the following relief:
9        (1) compensatory and punitive damages;
10        (2) injunctive and declaratory relief;
11        (3) attorneys' fees and costs; and
12        (4) such other relief as the court may deem
13    appropriate.
 
14    Section 30. Exceptions. This Act does not apply to:
15        (1) An officer or employee of a corporation or business
16    enterprise who, in his or her capacity as such, advises or
17    assists in the preparation of income tax returns relating
18    to such corporation or business enterprise.
19        (2) An attorney who advises or assists in the
20    preparation of income tax returns in the practice of law
21    and the employees of that attorney.
22        (3) A fiduciary and the employees thereof who advised
23    or assist in the preparation of income tax returns on
24    behalf of the fiduciary estate, the testator, trustee,
25    grantor or beneficiaries thereof.

 

 

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1        (4) A certified public accountant and the employees
2    thereof.
3        (5) An employee of a governmental unit, agency, or
4    instrumentality who advises or assists in the preparation
5    of income tax returns in the performance of his or her
6    official duties.
7        (6) An agent enrolled to practice before the Internal
8    Revenue Service.
 
9    Section 40. Tax preparation; practices.
10    (a) Tax preparers may not:
11        (1) ask a taxpayer to sign a blank or incomplete tax
12    return;
13        (2) misrepresent their qualifications;
14        (3) reveal any information appearing on a tax return or
15    any information gathered for its preparation, including
16    the fact of preparation and the content of solicitation
17    lists, to any person or business other than:
18            (A) the taxpayer;
19            (B) a person designated in writing by the taxpayer;
20        or
21            (C) anyone authorized to receive such information
22        by court order or by law;
23        (4) make any deceptive statement designed to persuade
24    taxpayers to use, or not to use, a tax preparer;
25        (5) induce or attempt to induce a taxpayer to violate

 

 

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1    any governmental law, rule, or regulation;
2        (6) use the word "accountant" in any advertisement
3    unless at least one Certified Public Accountant or Public
4    Accountant is present at each tax preparing location during
5    all business hours. The accountant or accountants employed
6    at that location must exercise control over all tax returns
7    prepared at that location;
8        (7) use the term "expert", "master", "consultant",
9    "specialist", or any similar terms in an advertisement
10    unless the tax preparer's relevant education or experience
11    is also disclosed in the advertisement and there is a
12    reasonable basis for any claims of expertise;
13        (8) alter a tax return after it has been signed by the
14    taxpayer, without the taxpayer's written consent; or
15        (9) charge a fee based upon the amount of tax owed or
16    refund due.
17    (b) Tax preparers that advertise their tax preparation
18services in a manner designed to reach the general public must
19post the following information clearly and conspicuously in
20each office:
21        (1) exactly how their fees are computed; if there is a
22    minimum fee for preparing a return, it must be disclosed;
23    if the fee is variable, the factors upon which the
24    variation depends must be disclosed;
25        (2) that the taxpayer is entitled to receive a copy of
26    his or her tax return at the time the original is given to

 

 

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1    the taxpayer for filing;
2        (3) that both the tax preparer and the taxpayer must
3    sign every tax return;
4        (4) that the tax preparer is not a certified public
5    accountant or a licensed attorney in Illinois, if such
6    information is true; and
7        (5) that the tax preparer or an agent will not
8    represent the taxpayer at any audit, if such information is
9    true; for the purposes of this item (5), "represent" means
10    to appear before any government tax administering
11    authority as an attorney, certified public accountant, or
12    enrolled agent; failure to make this disclosure means that
13    the tax preparer agrees to represent the taxpayer or to
14    provide representation.
15    (c) Tax preparers must:
16        (1) sign every tax return prepared;
17        (2) give a copy the tax return to the taxpayer at the
18    time the original tax return is given to the taxpayer for
19    filing;
20        (3) provide the taxpayer with a statement of the
21    charges for each tax return or schedule prepared; and
22        (4) return any of the taxpayer's personal papers upon
23    request, when the original tax return is given to the
24    taxpayer for filing, unless specifically permitted to
25    retain those papers under State law.
26    (d) Tax preparers may not:

 

 

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1        (1) guarantee a tax refund or guarantee that the
2    taxpayer will not be audited by any government tax agency;
3        (2) request a taxpayer to assign to the preparer any
4    portion of the refund due;
5        (3) use their addresses on a tax return as the place to
6    which a refund should be mailed, unless the taxpayer has
7    signed a power of attorney containing such authorization; a
8    fiduciary with authority to handle a taxpayer's financial
9    matters is not required to obtain this power of attorney;
10    or
11        (4) claim to give taxpayers an "instant tax refund"
12    that is actually an interest-bearing loan unless that fact
13    is disclosed to the taxpayer in accordance with federal and
14    State law.
15    (e) Each tax preparer shall retain a copy of every tax
16return prepared for a period of at least 3 years from the
17preparation date or the due date of the return, whichever is
18later.
19    (f) All disclosures required by this Section must be made
20in English and in any other language which the tax preparer
21uses to attract customers.
22    (g) Any individual or business which prepares income tax
23returns as an adjunct service to year-round fiduciary
24activities provided in the regular course of business for its
25customers is exempt from this Section. If the business also
26offers individual tax return preparation services which are not

 

 

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1related to such fiduciary activities, this Section applies to
2those services.
 
3    Section 45. Penalties. Any person, partnership,
4corporation, or other business entity who violates any
5provision of this Act rules adopted under this Act shall be
6liable for a civil penalty of not less than $250 nor more than
7$500 for the first violation and for each succeeding violation
8a civil penalty of not less than $500 nor more than $750.
 
9    Section 99. Effective date. This Act takes effect upon
10becoming law.