Department of Taxation and Finance

Information for Income Tax Return Preparers

Publication 58

This publication discusses the rules that apply to preparers of New York State personal income tax returns (including partnership and fiduciary returns), the requirements of the Tax Preparer Registration Program, and the electronic filing (e-file) mandate.

As you read this publication, be aware that the Tax Law defines tax return preparer differently for purposes of personal income tax {Tax Law § 658(g)} and for the Tax Preparer Registration Program {Tax Law § 32}.

For additional information that may be of interest to you as a preparer, see Tax professionals.

Office of Professional Responsibility

In 2013, the Tax Department created the Office of Professional Responsibility to:

• ensure compliance with regulations (see Regulations for tax return preparers),
• investigate complaints that are filed against tax return preparers, and
• assist in the department’s outreach with individuals that use tax return preparers and the tax preparation industry.

The office works closely with professional societies, consumer advocacy groups, and law enforcement to ensure all tax return preparers perform their duties in an ethical and legal manner.

As part of its initiatives, the Office of Professional Responsibility:

• requires all non-exempt tax return preparers to annually register with the Tax Department,
• helps consumers understand their rights when hiring a tax preparer, and
• identifies and disciplines tax return preparers who fail to meet regulatory standards.

For more information, see Office of Professional Responsibility.

Requirements for personal income tax return preparers 

Tax Law § 658(g)

For personal income tax purposes, Tax Law § 658(g) defines a tax return preparer (preparer) as any person who prepares any return or claim for refund for compensation, or who employs or engages anyone to prepare any return or claim for refund for compensation.

When preparing income tax returns and claims for refund, preparers must: 

• E-file returns if certain criteria are met (see E-file mandate for tax return preparers).
• Sign the income tax return or refund claim (see Signature requirements).
• Include the identifying number of the preparer on the income tax return or claim for refund. If an individual preparer is an employee of a preparer or is a partner in a partnership that is a preparer, the income tax return or claim for refund must also include the identifying number of the employer or partnership.
• Include the New York Tax Preparer Registration Identification Number (NYTPRIN) that is assigned by the Tax Department if the preparer is required to register with the Tax Department under Tax Law § 32 (see Tax Preparer Registration Program below) or enter an exclusion code if not required to register (see the instructions for applicable forms).

• Give a completed copy of the income tax return or claim for refund to the taxpayer no later than the time that the return or claim for refund is presented for the taxpayer’s signature.
• Keep a completed copy of the income tax return or claim for refund for each taxpayer or keep a list of the name and identification number of each taxpayer for whom a return or claim for refund was prepared. The completed copy of the return or claim for refund, or the list, must be available for inspection by the Tax Department upon request.
• Keep the completed copy of the return or the list for three years after the due date of the return (without regard to extensions), or three years after the date the return was presented to the taxpayer for signature, whichever is later.
• Keep the completed copy of the claim for refund or the list for three years from the time the claim for refund was presented to the taxpayer for signature.

Tax Preparer Registration Program

Tax Law § 32

Tax Law § 32 imposes an annual registration requirement on certain tax return preparers, facilitators of refund anticipation loans, and facilitators of refund anticipation checks. In addition, the law includes certain requirements and restrictions on tax return preparers and facilitators, with significant penalties for those who do not comply.

Tax Preparer Registration Program definitions

For purposes of the Tax Preparer Registration Program, a separate definition of a tax return preparer was added to § 32 to specify who would be required to register with the Tax Department and who would be excluded from the registration requirements. A tax return preparer who meets the definition of a commercial tax return preparer will also be required to pay an annual registration fee of $100.

The following definitions apply to the Tax Preparer Registration Program.

Tax return preparer

A tax return preparer is an individual who prepares a substantial portion of any return for compensation. Tax return preparers include:

• employees of a tax return preparer or a commercial tax return preparation business who prepare returns for clients of that preparer or preparation business; and
• partners who prepare returns for clients of a partnership engaged in a commercial tax return preparation business.

The following individuals are not considered tax return preparers for purposes of the registration program:

• attorneys, public accountants, enrolled agents, and certified public accountants;
• the employees of a law firm, public accounting firm, enrolled agent firm, or certified public accounting firm who prepare returns under the supervision of an attorney, public accountant, enrolled agent, or certified public accountant in that firm.
  • For purposes of this exclusion, a firm can be comprised of one or more lawyers, public accountants, enrolled agents, or certified public accountants. The term supervision, as used in this exclusion, means the direct onsite supervision of an employee, including the responsibilities of directing, assigning, and reviewing the employee’s work.
• volunteer tax preparers;
• employees of a business or partners in a partnership whose job responsibilities include preparation of only that business' or that partnership's returns; and
• employees of a tax return preparer or a commercial tax return preparation business who provide only clerical or other comparable services.

Note: You may be excluded from the definition of a tax return preparer based on one of the above criteria, but may still be considered a facilitator (see definition of facilitator below) and be subject to the registration requirements. If you are an attorney, public accountant, enrolled agent, or certified public accountant who is retired or no longer actively practicing your profession, you are not excluded from the definition of a tax return preparer if you prepare New York tax returns for compensation. (See Registration requirements.)

Commercial tax return preparer

A commercial tax return preparer is a tax return preparer who:

• prepared ten or more returns for compensation in the preceding calendar year, and will prepare at least one return for compensation during the current calendar year; or
• prepared fewer than ten returns for compensation in the preceding calendar year but will prepare ten or more returns for compensation during the current calendar year.

Commercial tax return preparation business

A commercial tax return preparation business is an entity that employs individuals who prepare tax returns and that meets the thresholds set in the definition of a commercial tax return preparer above.

Facilitator

A facilitator is a person who individually or in conjunction or cooperation with another person:

• solicits the execution of, processes, receives, or accepts an application or agreement for a refund anticipation loan or refund anticipation check;
• serves or collects upon a refund anticipation loan or refund anticipation check; or
• in any other manner facilitates the making of a refund anticipation loan or refund anticipation check.

Facilitator does not include an employee of a facilitator who provides only clerical or other comparable support services to the facilitator. 

Note: If you are excluded from the definition of a tax return preparer, you can still be considered a facilitator and be subject to the registration requirements (see Registration requirements).

Refund anticipation check (RAC)

A refund anticipation check is a check, stored value card, or other payment mechanism:

• that represents the proceeds of a tax refund or tax credit;
• that was issued by a depository institution or other person that received a direct deposit of the tax refund or tax credits; and
• where a fee or other consideration is paid for such payment mechanism.

Refund anticipation loan (RAL)

A refund anticipation loan is a loan that is secured by, or that the creditor arranges to be repaid directly or indirectly from, the proceeds of an income tax refund or tax credits. A RAL also includes any sale, assignment, or purchase of a tax refund at a discount or for a fee, whether or not the amount is required to be repaid to the buyer or assignee, if the Internal Revenue Service (IRS) or the Tax Department denies or reduces the amount of the tax refund.

Registration requirements

Each tax return preparer, as defined in Tax Preparation Registration Program definitions, who will prepare at least one return in a calendar year must register electronically with the Tax Department for that calendar year. Tax return preparers must register with the Tax Department for all applicable tax types prior to filing any returns to avoid penalties. 

Each facilitator who will facilitate the making of a RAC or a RAL in a calendar year must first register electronically with the Tax Department for that calendar year.

Tax return preparers and facilitators must register individually using our Online Services. Instructions are provided to guide users through the process.

During the registration process, a tax return preparer must certify that they either:

• do not have any child support obligations, or
• have child support obligations that are not four months or more in arrears.

If a tax return preparer is four months or more in arrears in their child support obligations, they  must meet one of the following exemptions in General Obligations Law (GOL) § 3-503 in order to register:

• they are making payments in accordance with GOL § 3-503,
• the child support obligation is the subject of a pending court proceeding, or
• they are receiving public assistance or supplemental security income.

A tax return preparer that cannot make the certification will not be able to register.

At the completion of the registration process, each tax return preparer and facilitator will be issued a tax return preparer or facilitator registration certificate and will be assigned a New York Tax Preparer Registration Identification Number (NYTPRIN). If an individual acts as both a tax return preparer and a facilitator, one registration certificate and NYTPRIN indicating both activities will be issued.

Annual re-registration

Each registered tax return preparer or facilitator must electronically re-register with the Tax Department annually. For additional information, see Tax preparer and facilitator registration and continuing education. 

Employee registration

A tax return preparer, commercial tax return preparation business, or facilitator must ensure that any employee or prospective employee who will meet the definition of a tax return preparer or facilitator is properly registered with the Tax Department and possesses a valid registration certificate and NYTPRIN. 

Fee requirements

At the time of registration or re-registration, each commercial tax return preparer must electronically pay an annual fee of $100 to the Tax Department. Registration of a commercial tax return preparer is not complete until the fee is paid. 

No fee is required for a tax return preparer who does not meet the definition of a commercial tax return preparer. Additionally, there is no fee for an individual who only meets the definition of a facilitator.  

Use of the registration certificate and the NYTPRIN

Each tax return preparer and facilitator must enter their NYTPRIN on:

• any required tax return that the tax return preparer is required to sign; and
• each RAL and RAC document the facilitator is required to sign.

The issuance of a tax return preparer or facilitator registration certificate and NYTPRIN is not an endorsement by the Tax Department and cannot be advertised as an endorsement of the tax return preparer or facilitator, their qualifications, or the services they rendered.

Restrictions on tax return preparers and facilitators

A tax return preparer who has not registered with the Tax Department or a commercial tax return preparer who has not registered and paid the required registration fee will not be allowed to represent their clients before the Tax Department or the Division of Tax Appeals. 

Tax Law § 32 also places additional restrictions on tax return preparers and facilitators regarding RACs and RALs. The law provides that a tax return preparer or facilitator must not:

• Charge or impose any fee or other consideration in the making or facilitating of a RAC or RAL apart from the fee charged by the creditor or bank that provides the loan or check.
• Engage in unfair or deceptive acts or practices in the facilitating of a RAC or a RAL, including making any oral statements contradicting any of the information required to be disclosed under the Consumer Bill of Rights Regarding Tax Preparers (see below).
• Directly or indirectly arrange for a third party to charge any interest, fee, or charge related to a RAC or RAL.
• Include any of the following provisions in any documents provided or signed to obtain a RAC or RAL, including the loan application or agreement:
  • a hold harmless clause;
  • a confession of judgment clause;
  • a waiver of the right to a jury trial,
  • any assignment of or order for payment of wages or other compensation for services,
  • a waiver of any provision of the Consumer Bill of Rights Regarding Tax Preparers;
• Take or arrange for a creditor to take a security interest in any property interest of the taxpayer other than the proceeds of the tax refund to secure payment of a RAL.
• Directly or indirectly, individually or in conjunction or cooperation with another person, engage in the collection of an outstanding or delinquent RAL for any creditor or assignee.
• Make a misrepresentation of fact in obtaining or attempting to obtain a registration.
• Engage in any other action prohibited by rules announced by the commissioner.

A tax return preparer who violates any one of the above provisions is subject to a penalty of $500 for each violation.

For more information on the Tax Preparer Registration Program, see:

• TSB-M-09(9)I, Tax Preparer Registration Program,
• TSB-M-09(16)I, Amendment to the Definition of Tax Return Preparer for the Tax Preparer Registration Program, and
• TSB-M-10(6)I, Enrolled Agents Excluded from the Definition of Tax Return Preparer for the Tax Preparer Registration Program.

Regulations for tax return preparers

20 NYCRR 2600

Part VV of Chapter 59 of the Laws of 2009 required the Commissioner of Taxation and Finance to convene a task force to prepare a report regarding the regulation of tax return preparers and authorized the commissioner to announce regulations to implement any of the recommendations of the task force.

In December 2013, the Tax Department announced regulations implementing the task force’s recommendations (20 NYCRR Part 2600).

The regulations set forth certain testing and continuing education requirements (see Continuing education requirements below) as well as standards of conduct, grounds for discipline, and forms of discipline.

While the regulations generally apply only to tax return preparers who are required to register under Tax Law § 32, the department may refer individuals who fail to comply with the standards of conduct to their licensing agencies even if those individuals are not required to register with the department.

In addition to the penalties imposed under Tax Law § 32, violation of the regulations for tax return preparers may result in the revocation, termination, or suspension of a tax return preparer’s registration.

Any tax return preparer has the right to request a hearing before the Bureau of Conciliation and Mediation Services, or the Division of Tax Appeals, if they receive a:

• cancellation;
• revocation or suspension of a license, permit, or registration;
• denial of application for a license, permit, or registration; or
• any other notice of disciplinary action.

For additional information on Part 2600, see Office of Professional Responsibility.

Continuing education requirements

All commercial tax return preparers who will prepare New York State personal income tax returns must complete continuing education requirements.

If you are a commercial preparer, you are required to complete the following continuing education requirements:

• Commercial preparers with less than three years of experience are required to complete 16 hours of continuing education coursework. These individuals will have to complete four hours of coursework each calendar year thereafter.
• Commercial preparers with three or more years of experience must complete four hours of continuing education coursework each calendar year starting in 2015.

If you do not meet the definition of a commercial preparer, you are not required to take any courses. However, you may voluntarily complete these continuing education requirements.

For additional information, see Tax preparer and facilitator registration and continuing education.

Consumer bill of rights regarding tax preparers

General Business Law Article 24-C

The Laws of 2008, Chapter 432 added Article 24-C to the General Business Law. The law is intended to increase consumer protection in the paid income tax preparer industry. As part of providing consumer protection, the law provides certain requirements for preparers to follow. 

See Tax preparers operating within New York City.

Tax preparers are subject to the following requirements unless specifically exempt by law:

• Provide contact information. Tax preparers are required to provide each of their customers with a receipt containing an address and phone number at which the preparer can be contacted throughout the year. If the actual person who prepared the return is an employee, partner, or shareholder of an entity that is a tax preparer, the general address and phone number of the entity should be on the receipt.
• Distribute Publication 135, Consumer Bill of Rights Regarding Tax Preparers. The Tax Department is required to produce and make available to tax preparers an informational flier providing certain information for consumers about their rights regarding tax preparers. See Publication 135, Consumer Bill of Rights.

By January 1 of each year, tax preparers are required to obtain the current version of Publication 135 from the Tax Department website and reproduce it for their customers. In addition, they must give each customer a free copy of Publication 135 before any further discussions with the customer. At that time, they must direct each customer to review the publication and must answer any questions the customer may have regarding the content of the publication.

By no later than October 15 of each year, the Tax Department must send a copy of Publication 135 to each tax preparer who has been found to be in violation of the consumer bill of rights requirements regarding tax preparers as stated above. 

Note: The Tax Department will not print and mail bulk orders of Publication 135 to tax preparers for distribution to their customers. 

The following tax preparers are exempt from the above requirements to provide a receipt containing contact information and to distribute Publication 135:

• an employee or officer of a business enterprise who is preparing the tax returns of that business enterprise;
• a fiduciary, and any employee of the fiduciary, who advises or assists in the preparation of income tax returns on behalf of the fiduciary estate, the testator, trustee, grantor, or beneficiaries;
• an attorney who advises or assists in the preparation of tax returns in the practice of law, and their employees;
• a certified public accountant (CPA) licensed under the New York State Education Law or licensed by one or more of the states or jurisdictions of the United States, and their employees;
• a public accountant licensed under the New York State Education Law and their employees;
• an employee of a governmental unit, agency, or instrumentality who advises or assists in the preparation of income tax returns in the performance of their duties; or
• an agent enrolled to practice before the IRS.

For more information, see Tax Professionals and TSB-M-09(13)I, Consumer Bill of Rights Regarding Tax Preparers.

Refund anticipation loans (RALs)

All tax preparers are subject to the following requirements concerning refund anticipation loans (RALs).

Advertisements

Tax preparers are prohibited from advertising RALs as refunds (for example, advertising a RAL as an instant refund).

Any advertisement by a tax preparer that mentions RALs must state conspicuously that a RAL is in fact a loan and that a fee or interest will be charged by the lending institution.

The lending institution must be identified in the advertisement.

Disclosure Statements

Before a taxpayer enters into a RAL, the tax preparer facilitating the loan must provide a disclosure statement to the taxpayer in a format specified in TSB-M-09(13)I, Consumer Bill of Rights Regarding Tax Preparers.

The disclosure must be completed accurately with all relevant information for each taxpayer.
The tax preparer (and facilitator, if different) must also include their name and unique identification number that is required and assigned by the Tax Department under Tax Law § 32.

The completed disclosure statement must be signed by the taxpayer before they enter into a RAL.

In addition, the facilitator must tell the taxpayer (in the language primarily used for oral communication between the facilitator and the taxpayer) all the following:

• the RAL is a loan that only lasts one to two weeks; 
• if the taxpayer’s tax refund is less than expected, the taxpayer is liable for the full amount of the loan and must repay any difference;
• if the taxpayer’s refund is delayed for any reason, there may be additional costs, such as additional interest, that the taxpayer will have to pay;
• the amount of the RAL fee; and
• the RAL interest rate.

The Tax Department will not provide the disclosure statement in an official form for tax preparer use.

For more information, see Tax Professionals and TSB-M-09(13)I, Consumer Bill of Rights Regarding Tax Preparers.

Refund anticipation checks (RACs)

All tax preparers are subject to the following requirements concerning refund anticipation checks (RACs).

Disclosure Statements

Before any taxpayer enters into an agreement to receive a RAC, the tax preparer facilitating the agreement must provide a disclosure statement to the taxpayer in a format specified in TSB-M-09(13)I, Consumer Bill of Rights Regarding Tax Preparers.

The disclosure must be completed accurately with all relevant information for each taxpayer.
The tax preparer (and facilitator, if different) must also include their name and unique identification number that is required and assigned by the Tax Department under § 32 of the Tax Law.

In addition, the facilitator must tell the taxpayer (in the language primarily used for oral communication between the facilitator and the taxpayer) all the following:

• the amount of the RAC fee; and
• that the taxpayer can receive their refund in the same amount of time without a fee if the tax return is filed electronically and the taxpayer chooses direct deposit to their own personal bank account.

The completed disclosure statement must be signed by the taxpayer before they enter into a RAC agreement.

The Tax Department will not provide the disclosure statement in an official form for tax preparer use.

For more information, see Tax Professional and TSB-M-09(13)I, Consumer Bill of Rights Regarding Tax Preparers.

Tax preparers operating within New York City

Tax preparers operating within New York City are not subject to the provisions of General Business Law, Article 24-C for tax returns actually prepared within the city. Instead, the Administrative Code of the City of New York, Title 20, Chapter 5, Subchapter 8 provides rules that apply specifically to tax preparers operating in New York City. For more information on New York City’s Consumer Bill of Rights Regarding Tax Preparers, visit New York City Department of Consumer Affairs or dial 311 (212-NEW-YORK if you are outside New York City).

Posting requirements

Tax return preparers and facilitators, must post the following items—prominently and conspicuously—at every location where they provide tax preparation or facilitation services to clients: 

• a copy of their current Certificate of Registration, issued by the Tax Department
• a current price list in at least 14-point type that includes, but is not limited to:
  • a list of all tax return preparation and facilitation services; 
  • the minimum charge for each service, including each type of federal or New York State tax return prepared or facilitation services to be provided; and
  • a list of the factors—and their associated fees—that may increase your stated charge
• the Tax Department's Publication 135.1, Consumer Bill of Rights Regarding Tax Preparers.

Note: The Tax Department has two versions of the Consumer Bill of Rights Regarding Tax Preparers. Tax preparers and facilitators must:

• post Publication 135.1 at your place of business, and
• hand each potential client a hard copy of Publication 135 (or, if you prepare returns in New York City, the New York City Consumer Bill of Rights).

For more information, see Posting requirements for tax return preparers and facilitators.

Electronic Filing (e-file)

E-file programs use computer software or an Internet application to file income tax returns electronically.

To participate in the New York State e-file program, a preparer must:

• be an electronic return originator (ERO) authorized to e-file returns with the IRS, and
• use tax preparation software that has been tested and approved by the New York State Tax Department.

A preparer is not allowed to charge a separate fee for the electronic filing of New York State tax documents. 

A preparer who is not currently an authorized ERO should visit the IRS and apply online through the IRS e-services for tax professionals.

For detailed information on New York State’s e-file program, see Tax return preparer e-file mandate.

E-file mandate for tax return preparers

Tax Law § 29(b)(2)

The Tax Law requires many preparers to e-file their clients’ tax returns, including extensions. The law applies to returns required to be filed under Tax Law Article 22 (the personal income tax law) that the Commissioner of Taxation and Finance has authorized to be filed electronically. If a preparer is using tax software that does not support the e-filing of an extension, the preparer must file the extension directly on the New York State Tax Department at Department of Taxation and Finance.

Terms

Authorized tax document

An authorized tax document is any return, report, or other document the Commissioner of the Tax Department has authorized to be filed electronically. For purposes of the e-file mandate, an authorized tax document does not include any return or report that includes one or more tax documents that cannot be filed electronically.

Tax software 

Tax software is any computer software program intended for tax return preparation purposes. This includes, but is not limited to, an off-the-shelf software program loaded onto a computer, an online tax preparation application, or a tax preparation application hosted by the Tax Department.

A preparer must e-file all individual income tax returns and extensions, all fiduciary returns, and all partnership returns (including Form IT-204-LL, Partnership, Limited Liability Company, and Limited Liability Partnership Filing Fee Payment Form) and extensions if the preparer:

• was subject to the mandate in a prior year; or
• meets both of the following conditions:
  • the preparer or the preparer's firm prepared authorized tax documents for more than 10 different taxpayers in the prior calendar year; and
  • uses tax software to prepare one or more of these tax documents in the current calendar year.

Preparers subject to the e-file mandate must continue to e-file all their clients’ authorized tax documents in all future years regardless of the number of returns prepared or number of taxpayers for which an authorized tax document was prepared.

You may be subject to a penalty if you are subject to the e-file mandate and fail to e-file a client’s return. For more information, see Failure to file electronically.

If you have reasonable cause not to e-file, you must maintain adequate documentation. 

The department will make reasonable cause determinations on a case-by-case basis consistent with the current reasonable cause standards (included in 20 NYCRR §§§ 2392.1, 2396.11, & 2397.7).

Reasonable cause

The department will also take the following circumstances into account in determining whether reasonable cause exists:

• whether the preparer’s New York State approved e-file software supports e-filing of a return;
• whether the return was e-filed, but rejected for a condition that cannot be identified or resolved;
• whether an extended internet outage existed at the preparer’s place of business;
• any other cause that appears to a person of ordinary prudence and intelligence as a reasonable cause for the failure to e-file and that clearly indicates an absence of willful intent to disobey the e-file mandate; and
• a preparer’s overall compliance with the New York State e-file mandate.

While the department will make reasonable cause determinations on a case-by-case basis, the following facts and circumstances will never be considered reasonable cause:

• a client’s desire to opt out of e-filing;
• a preparer’s failure to obtain an EFIN;
• ignorance of the law; and
• reluctance to provide bank account information electronically.

For additional information on the e-file mandate (including the e-file mandate for certain business tax returns), see Tax return preparer e-file mandate.

Signature requirements

Paper returns

A preparer may manually sign original tax returns, amended tax returns, and claims for refund. As an alternative, the preparer may sign by means of a rubber stamp, mechanical device, or computer software program. These alternative methods of signing must include either an exact copy of the individual preparer’s signature or the individual preparer’s printed name. A preparer using one of these alternatives is personally responsible for affixing the signature to the returns or claims for refund.

A preparer who uses alternative methods of signing must provide all the other preparer information that is required on the tax returns and claims for refund, such as the name, address, and relevant employer identification number (EIN). In addition, a preparer must provide the NYTPRIN if required to have one and the same identification number used for federal personal income tax purposes (social security number or preparer tax identification number (PTIN)). If a federal income tax return is not required, a preparer must use the preparer’s PTIN unless the preparer does not have one; otherwise, the preparer must use the preparer’s social security number. 

For more information, see TSB-M-05(1)I, Alternative Methods of Signing for Tax Return Preparers.

E-file returns

For e-filed personal income tax returns, both the taxpayer and the preparer must sign Form TR-579-IT, New York State E-file Signature Authorization for Forms IT-201, IT-201-X, IT-203, IT-203-X, IT-214, and NYC-210. For tax years beginning on or after January 1, 2014, taxpayers are allowed to electronically send their authorization to e-file their individual personal income tax returns to their tax preparer. For e-filed partnership returns, both the taxpayer and the preparer must sign Form TR-579-PT, New York State E-File Signature Authorization for Forms IT-204 and IT-204-LL.

For e-filed fiduciary returns, the fiduciary must sign Form TR-579.2-IT, New York State E-File Signature Authorization for Form IT-205.

Forms TR-579-IT, TR-579-PT, and TR-579.2-IT must be retained by the preparer for three years. The preparer must also sign the return electronically by marking a box that indicates the preparer has read and agreed to the department’s declaration certification language.

Effective October 6, 2020, electronic signatures may be used by taxpayers on all forms that begin with TR-579. If the software provides electronic signature capability and the other requirements (see below) are also met, a form that begins with TR-579 that is electronically signed by the taxpayer is acceptable. If taxpayers use an electronic signature, the software and the ERO must be able to verify the taxpayer’s identity.

Electronic signatures appear in many forms and may be created by many different technologies. The Tax Department does not require that any specific technology be used. For more information, see TSB-M-20(1)C, (2)I, E-File Authorizations (TR-579 forms) for Taxpayers Using a Paid Preparer for Electronically Filed Tax Returns.

E-file extensions

If there is no tax due on an e-filed extension, there is no signature requirement for the taxpayer or the preparer.

If there is tax due with an e-filed extension, and the extension is e-filed using tax preparation software, the taxpayer must pay the balance due by authorizing an electronic funds withdrawal using Form TR-579.1-IT, New York State Taxpayer Authorization for Electronic Funds Withdrawal for Form IT-370.

Form TR-579.1-IT will establish that the taxpayer has authorized the electronic return originator (ERO) to include the information necessary for the Tax Department to initiate the withdrawal. The ERO is not required to sign Form TR-579.1-IT for an extension; however, the ERO must retain a copy for three years. In addition, the ERO or preparer must also sign the return electronically by marking a box that indicates that they have read and agreed to the department’s declaration certification language.

If there is tax due with an e-filed extension, the preparer may file the extension directly on the Tax Department's website Department of Taxation and Finance to allow the taxpayer the following payment options: 

• electronic funds withdrawal,
• credit card, or 
• check or money order.

Online Services

Online Services offer tax professionals secure and convenient access to a variety of tax services. Access is available 24 hours a day, 7 days a week (except for scheduled maintenance). Once registered as a tax professional, you can access available services on behalf of your clients as authorized. To register as a tax professional, you must have a valid Electronic Filer Identification Number (EFIN) issued by the IRS.

Some of the Online Services available include:

• making payments of estimated tax,
• viewing and reconciling estimated tax accounts,
• viewing and paying tax bills (all taxes), and
• accessing services for other tax types.

For more information, see Online Services.

Note: You must register as a tax return preparer or facilitator using your Individual Online Services account.

Privacy and confidentiality

The Tax Law contains strict secrecy provisions to protect the confidentiality of tax returns and tax return information. Consequently, a taxpayer must give specific written authorization to a practitioner, paid preparer, or other representative before they will be given access to a taxpayer’s confidential records or be allowed to represent a taxpayer before the Tax Department or the Division of Tax Appeals. There are various levels of authorization a taxpayer can give.

Third-party designee

If a taxpayer wants to authorize a preparer or other designee to discuss their tax return with the New York State Tax Department, the taxpayer must mark the Yes box in the Third-party designee area of their return and enter the information requested.

If the taxpayer marks the Yes box, the taxpayer is authorizing the Tax Department to discuss with the third-party designee any questions that arise during the processing of their return. The taxpayer is also authorizing the designee to give and receive confidential taxpayer information relating to:

• the return, including missing information,
• any notices or bills arising from the filing that the taxpayer shares with the designee (they will not be sent to the designee),
• any payments and collection activity arising from the filing, and
• the status of the taxpayer’s return or refund.

Taxpayers are not authorizing the designee to receive any refund check, bind the taxpayer to anything (including additional tax liability), or otherwise represent the taxpayer before the Tax Department. If a taxpayer wants the designee to perform those services, the taxpayer should file a power of attorney.

The authorization for the tax return will not expire, but will only cover matters relating to that return. 

Power of attorney

A power of attorney (POA) is evidence that a practitioner or other person may receive confidential tax information and make legally binding decisions on behalf of a taxpayer. The POA must contain explicit authorization for the practitioner to act for the taxpayer, and must be properly completed and signed.

The Tax Department prefers that preparers use Form POA-1, Power of Attorney, but will accept other forms if they contain all the necessary elements. Form POA-1 may be used for tax matters administered by the New York State Tax Department, the New York City Department of Finance, or both.

For more information, including the most current version of Form POA-1, see Power of attorney and other authorizations.

E-ZRep Form TR-2000, Tax Information Access and Transaction Authorization Form

The online E-ZRep Form TR-2000, allows a tax professional to:

• access and receive confidential information about their business or individual taxpayer clients; and
• conduct transactions on behalf of clients through a Tax Professional Online Services account.

For a complete list of online services that your clients can authorize you to use on their behalf by completing Form TR-2000, see Form TR-2000.1, Tax Information Access and Transaction Authorization Information Page.

Form DTF-505, Authorization for Release of Photocopies of Tax Returns and/or Tax Information

Taxpayers can use Form DTF-505 to authorize the Tax Department to release specific items of tax information to a preparer without a power of attorney. Form DTF-505 must include the following:

• the taxpayer’s name, identification number, and address;
• the specific reference to the year and tax type of the return, report, application, and so on, to be released (a fee of twenty-five cents per page may apply);
• the name and address of the individual to whom the information is to be released; and
• the taxpayer’s properly authorized signature.

Penalties

Failure to conform to certain requirements

Tax Law §§ 685(u)(3) and 685(u)(4)

A penalty of $50 per return or claim for refund (maximum penalty of $25,000) may be assessed against a preparer for failure to (1) furnish a completed copy of the income tax return or claim for refund to the taxpayer, or (2) keep a copy or list of the income tax return or claim for refund (see Requirements for personal income tax return preparers).

Failure to register

Tax Law §§ 32(g)(1) and 1833

The Tax Department will issue a notice to a tax return preparer or facilitator who fails to register or re-register with the Tax Department allowing a 15-day period to resolve the registration issue. The Tax Department is authorized to send the notice to the tax return preparer’s or facilitator’s Online Services account.

A penalty of $250 will be imposed on a tax return preparer or facilitator who fails to register or re-register with the Tax Department in accordance with the notice. The penalty can be waived only if the tax return preparer or facilitator shows good cause.

In addition, a commercial tax return preparer who willfully, and with the intent to evade the requirements of the Tax Preparer Registration Program, fails to register as required by the program will be guilty of a class A misdemeanor.

Failure to pay annual registration fee

Tax Law § 32(g)(2)

The Tax Department will issue a notice to a commercial tax return preparer who fails to pay the registration fee for that calendar year allowing a 15-day period to resolve the registration issue. The Tax Department is authorized to send the notice to the commercial tax return preparer’s Online Services account.

We will impose a penalty of $50 for each return that a commercial tax return preparer has filed with the Tax Department in the calendar year if the commercial tax return preparer fails to pay the registration fee for that calendar year in accordance with the notice. The maximum penalty imposed on any commercial tax return preparer for failure to pay the registration fee during any calendar year cannot exceed $5,000. We will waive the penalty if the commercial tax return preparer shows good cause.

Employment of an unregistered tax return preparer

Tax Law § 32(g)(5)

We will impose a penalty of $500 per occurrence if a tax return preparer, a facilitator, or a commercial tax return preparation business employs an individual to prepare tax returns who is not registered with the Tax Department and does not possess a valid tax preparer or facilitator registration certificate and NYTPRIN. We will waive the penalty if the tax return preparer or facilitator shows good cause.

Failure to file electronically

Tax Law § 29(e)(1)

A penalty of $50 for each return or extension that is not e-filed may be assessed against a preparer subject to the e-file mandate, unless the failure to e-file is due to reasonable cause. A preparer subject to the mandate who has not e-filed a return or extension due to reasonable cause will need to provide adequate documentation to the department if receives a penalty bill for failing to e-file.

Charging a separate fee to e-file New York returns

Tax Law § 34(c)  

A penalty of $500 may be assessed against a preparer the first time a separate fee is charged to e-file a New York tax document. A penalty of $1,000 may be assessed for each subsequent occurrence. 

Failure to sign

Tax Law § 32(g)(3) and 1833

We will impose a penalty of $250 on a tax return preparer for each failure to sign their name to any return that requires the tax return preparer’s signature or on a facilitator who fails to sign their name to any RAL or RAC facilitation document. We will waive the penalty if the tax return preparer or facilitator shows good cause. 

The maximum penalty imposed on any tax return preparer with respect to returns filed during any calendar year by the tax return preparer, or on any facilitator with respect to any RAL or RAC facilitation documents completed during any calendar year by the facilitator, cannot exceed $10,000. However, if a tax return preparer or facilitator was subject to this penalty for a preceding calendar year and the preparer or facilitator fails to sign their name on any return or document during a subsequent calendar year, the penalty for each failure will be $500, and no annual cap will apply.

In addition, a commercial tax return preparer who willfully, and with the intent to evade the requirements of the Tax Preparer Registration Program, fails to sign their name to any tax return that requires a signature will be guilty of a class A misdemeanor.

Failure to include the NYTPRIN

Tax Law § 32(g)(4)

We will impose a penalty of $100 on a tax return preparer or a facilitator for each failure to include the NYTPRIN assigned by the Tax Department on any required return or any RAL or RAC facilitation document that requires their signature (see Use of the registration certificate and the NYTPRIN). However, this penalty can be waived if the tax return preparer or facilitator shows good cause.

The maximum amount of this penalty imposed on any tax return preparer or facilitator during any calendar year cannot exceed $2,500. However, if a tax return preparer or facilitator was subject to this penalty for a preceding calendar year and fails to include their NYTPRIN on one or more returns or documents during a subsequent calendar year, the penalty for each failure will be $250, and no annual cap will apply.

Failure to post required items for tax return preparers or facilitators

Tax Law § 32(h)(3)

We will impose a penalty of $500 for the first month of noncompliance to prominently and conspicuously post all of the following documents at every location where tax preparation or facilitation services to clients is provided: 

• a copy of your current Certificate of Registration, issued by the Tax Department,
• a current price list (see example) in at least fourteen-point type, and,
• the Tax Department's Publication 135.1.

We will impose a penalty of $500, for any subsequent month of noncompliance, up to $10,000 in any calendar year.

Aiding or assisting in the giving of fraudulent returns, reports, statements, or other documents

Tax Law § 685(r)

A penalty of $5,000 may be assessed against a preparer for aiding or assisting in the giving of fraudulent returns, reports, statements, or other documents. 

Understatement of liability

Tax Law § 685(aa)

A penalty of $100, to a maximum of $1,000, will be imposed upon a tax return preparer who takes a position on any income tax return or credit claim form that either understates a tax liability or increases a claim for refund and should have reasonably known that the position was not proper.

A penalty of $500, to a maximum of $5,000, will be imposed upon a tax return preparer who takes a position on any income tax return or claim for refund is due to any reckless or intentional disregard of the law, rules, or regulations by the preparer.

An understatement of liability means any understatement of the net amount payable with respect to any tax imposed under Article 22 (personal income tax), or any overstatement of the net amount of credit or refund with respect to personal income tax. The preparer penalty imposed under Tax Law § 685(aa) will not apply if the penalty under Tax Law § 685(r) is imposed on the preparer with respect to the understatement.

Certain transactions and related information regarding tax shelters

The Tax law provides for reporting requirements with respect to the disclosure of information relating to transactions that present the potential for tax avoidance (a tax shelter). The Tax Law also imposes stiffer penalties for nondisclosure and the underpayment of taxes due to participation in these transactions. 

For information relating to the disclosure of certain transactions and related information regarding tax shelters, see: 

• TSB-M-05(2)C, (4)I, Disclosure of Certain Transactions and Related Information Regarding Tax Shelters;
• TSB-M-05(2.1)C, (4.1)I, Supplement to the Disclosure of Certain Transactions and Related Information Regarding Tax Shelters;
• TSB-M-05(2.2)C, (4.2)I, Additional Supplement to the Disclosure of Certain Transactions and Related Information Regarding Tax Shelters;
• TSB-M-07(4)C, (4)I, Amendments to the Procedural Regulations Relating to New York Reportable Transactions;
• TSB-M-07(5)C, (5)I, Notification of New York Listed Transaction – Certain Charitable Contribution Deductions;
• TSB-M-07(7)C, (6)I, Extension of Tax Shelter Provisions; and
• TSB-M-08(9)C, (4)I, Extension of Tax Shelter Provisions.