HF 1800

as introduced - 90th Legislature (2017 - 2018) Posted on 03/01/2017 02:05pm

A bill for an act
relating to taxation; modifying provisions for paid preparers; amending Minnesota
Statutes 2016, sections 270C.445, subdivisions 2, 3, 5a, 6, 6a, 6b, 6c, 7, 8, by
adding a subdivision; 270C.446, subdivisions 2, 3, 4, 5; 270C.447, subdivisions
1, 2, 3, by adding a subdivision; 289A.60, subdivisions 13, 28; repealing Minnesota
Statutes 2016, sections 270C.445, subdivision 1; 270C.447, subdivision 4.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2016, section 270C.445, subdivision 2, is amended to read:

Subd. 2.

Definitions.

(a) For purposes of this section new text begin and sections 270C.4451 to
270C.447 new text end , the following terms have the meanings given.

(b) "Advertise" means to solicit business through any means or medium.

(c) "Client" means deleted text begin an individual deleted text end new text begin a person new text end for whom a tax preparer performs or agrees
to perform tax preparation services.

(d) "Facilitate" means to individually or in conjunction or cooperation with another
person:

(1) accept an application for a refund anticipation loan;

(2) pay to a client the proceeds, through direct deposit, a negotiable instrument, or any
other means, of a refund anticipation loan; or

(3) offer, arrange, process, provide, or in any other manner act to allow the making of,
a refund anticipation loan.

deleted text begin (e) "Person" means an individual, corporation, partnership, limited liability company,
association, trustee, or other legal entity.
deleted text end

deleted text begin (f) deleted text end new text begin (e) new text end "Refund anticipation check" means a negotiable instrument provided to a client
by the tax preparer or another person, which is issued from the proceeds of a taxpayer's
federal or state income tax refund or both and represents the net of the refund minus the tax
preparation fee and any other fees. A refund anticipation check includes a refund transfer.

deleted text begin (g) deleted text end new text begin (f) new text end "Refund anticipation loan" means a loan or any other extension of credit, whether
provided by the tax preparer or another entity such as a financial institution, in anticipation
of, and whose payment is secured by, a client's federal or state income tax refund or both.

deleted text begin (h) deleted text end new text begin (g) new text end "Tax preparation services" means services provided for deleted text begin a fee or other consideration deleted text end new text begin
compensation new text end to a client to:

(1) assist with preparing or filing deleted text begin state or federal individual income tax returns deleted text end new text begin a return new text end ;

(2) assume final responsibility for completed work on deleted text begin an individual income tax deleted text end new text begin a new text end return
on which preliminary work has been done by another; deleted text begin or
deleted text end

new text begin (3) sign or include on a return the preparer tax identification number required under
section 6109(a)(4) of the Internal Revenue Code; or
new text end

deleted text begin (3) deleted text end new text begin (4) new text end facilitate the provision of new text begin a new text end refund anticipation deleted text begin loans and deleted text end new text begin loan or a new text end refund
anticipation deleted text begin checks deleted text end new text begin check new text end .

deleted text begin (i) deleted text end new text begin (h) new text end "Tax preparer" or "preparer" means a person providing tax preparation services
deleted text begin subject to this section. deleted text end new text begin except:
new text end

new text begin (1) an employee who prepares their employer's return;
new text end

new text begin (2) any fiduciary, or the regular employees of a fiduciary, while acting on behalf of the
fiduciary estate, testator, trustor, grantor, or beneficiaries of them;
new text end

new text begin (3) nonprofit organizations providing tax preparation services under the Internal Revenue
Service Volunteer Income Tax Assistance Program or Tax Counseling for the Elderly
Program;
new text end

new text begin (4) a person who merely furnishes typing, reproducing, or other mechanical assistance;
new text end

new text begin (5) a third-party bulk filer as defined in section 290.92, subdivision 30, that is currently
registered with the commissioner; and
new text end

new text begin (6) a certified service provider as defined in section 297A.995, subdivision 2, paragraph
(c), that provides all of the sales tax functions for a retailer not maintaining a place of
business in this state as described in section 297A.66.
new text end

new text begin (i) Except as otherwise provided, "return" means:
new text end

new text begin (1) a return as defined in section 270C.01, subdivision 8;
new text end

new text begin (2) a claim for refund of an overpayment;
new text end

new text begin (3) a claim filed pursuant to chapter 290A; and
new text end

new text begin (4) a claim for a credit filed under section 290.0677, subdivision 1.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for claims and returns filed after December
31, 2017.
new text end

Sec. 2.

Minnesota Statutes 2016, section 270C.445, subdivision 3, is amended to read:

Subd. 3.

Standards of conduct.

No tax preparer shall:

(1) without good cause fail to promptly, diligently, and without unreasonable delay
complete a client's deleted text begin tax deleted text end return;

(2) obtain the signature of a client to a deleted text begin tax deleted text end return or authorizing document that contains
blank spaces to be filled in after it has been signed;

(3) fail to sign a client's deleted text begin tax deleted text end return when deleted text begin payment deleted text end new text begin compensation new text end for services rendered
has been made;

new text begin (4) fail to provide on a client's return the preparer tax identification number when required
under section 6109(a)(4) of the Internal Revenue Code or section 289A.60, subdivision 28;
new text end

deleted text begin (4) deleted text end new text begin (5) new text end fail or refuse to give a client a copy of any document requiring the client's signature
within a reasonable time after the client signs the document;

deleted text begin (5) deleted text end new text begin (6) new text end fail to retain for at least four years a copy of deleted text begin individual income tax deleted text end new text begin a client's new text end
returns;

deleted text begin (6) deleted text end new text begin (7) new text end fail to maintain a confidential relationship with clients or former clients;

deleted text begin (7) deleted text end new text begin (8) new text end fail to take commercially reasonable measures to safeguard a client's nonpublic
personal information;

deleted text begin (8) deleted text end new text begin (9) new text end make, authorize, publish, disseminate, circulate, or cause to make, either directly
or indirectly, any false, deceptive, or misleading statement or representation relating to or
in connection with the offering or provision of tax preparation services;

deleted text begin (9) deleted text end new text begin (10) new text end require a client to enter into a loan arrangement in order to complete a deleted text begin tax deleted text end new text begin client's new text end
return;

deleted text begin (10) deleted text end new text begin (11) new text end claim credits or deductions on a client's deleted text begin tax deleted text end return for which the tax preparer
knows or reasonably should know the client does not qualify;

new text begin (12) report a household income on a client's claim filed under chapter 290A that the tax
preparer knows or reasonably should know is not accurate;
new text end

new text begin (13) engage in any conduct that is subject to a penalty under section 289A.60, subdivision
13, 20, 20a, 26, or 28;
new text end

new text begin (14) whether or not acting as a taxpayer representative, fail to conform to the standards
of conduct required by Minnesota Rules, part 8052.0300, subpart 4;
new text end

new text begin (15) whether or not acting as a taxpayer representative, engage in any conduct that is
incompetent conduct under Minnesota Rules, part 8052.0300, subpart 5;
new text end

new text begin (16) whether or not acting as a taxpayer representative, engage in any conduct that is
disreputable conduct under Minnesota Rules, part 8052.0300, subpart 6;
new text end

deleted text begin (11) deleted text end new text begin (17) new text end charge, offer to accept, or accept a fee based upon a percentage of an anticipated
refund for tax preparation services;

deleted text begin (12) deleted text end new text begin (18) new text end under any circumstances, withhold or fail to return to a client a document
provided by the client for use in preparing the client's deleted text begin tax deleted text end return;

deleted text begin (13) deleted text end new text begin (19) new text end establish an account in the preparer's name to receive a client's refund through
a direct deposit or any other instrument unless the client's name is also on the account,
except that a taxpayer may assign the portion of a refund representing the Minnesota
education credit available under section 290.0674 to a bank account without the client's
name, as provided under section 290.0679;

deleted text begin (14) deleted text end new text begin (20) new text end fail to act in the best interests of the client;

deleted text begin (15) deleted text end new text begin (21) new text end fail to safeguard and account for any money handled for the client;

deleted text begin (16) deleted text end new text begin (22) new text end fail to disclose all material facts of which the preparer has knowledge which
might reasonably affect the client's rights and interests;

deleted text begin (17) deleted text end new text begin (23) new text end violate any provision of section 332.37;

deleted text begin (18) deleted text end new text begin (24) new text end include any of the following in any document provided or signed in connection
with the provision of tax preparation services:

(i) a hold harmless clause;

(ii) a confession of judgment or a power of attorney to confess judgment against the
client or appear as the client in any judicial proceeding;

(iii) a waiver of the right to a jury trial, if applicable, in any action brought by or against
a debtor;

(iv) an assignment of or an order for payment of wages or other compensation for
services;

(v) a provision in which the client agrees not to assert any claim or defense otherwise
available;

(vi) a waiver of any provision of this section or a release of any obligation required to
be performed on the part of the tax preparer; or

(vii) a waiver of the right to injunctive, declaratory, or other equitable relief or relief on
a class basis; or

deleted text begin (19) deleted text end new text begin (25) new text end if making, providing, or facilitating a refund anticipation loan, fail to provide
all disclosures required by the federal Truth in Lending Act, United States Code, title 15,
in a form that may be retained by the client.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for claims and returns filed after December
31, 2017.
new text end

Sec. 3.

Minnesota Statutes 2016, section 270C.445, subdivision 5a, is amended to read:

Subd. 5a.

Nongame wildlife checkoff.

A tax preparer must give written notice of the
option to contribute to the nongame wildlife management account in section 290.431 to
corporate clients that file an income tax return and to individual clients who file an income
tax return or deleted text begin property tax refund deleted text end claim deleted text begin form deleted text end new text begin under chapter 290A new text end . This notification must be
included with information sent to the client at the same time as the preliminary worksheets
or other documents used in preparing the client's return and must include a line for displaying
contributions.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for claims and returns filed after December
31, 2017.
new text end

Sec. 4.

Minnesota Statutes 2016, section 270C.445, subdivision 6, is amended to read:

Subd. 6.

Enforcement; new text begin administrative order; new text end penalties new text begin ; cease and desist new text end .

new text begin (a) new text end The
commissioner may impose an administrative penalty of not more than $1,000 per violation
of subdivision 3 deleted text begin , 3a, 4, 5, or 5b deleted text end new text begin or 5, or section 270C.4451 new text end , provided that a penalty may not
be imposed for any conduct deleted text begin that is also subject to the deleted text end new text begin for which a new text end tax deleted text begin return deleted text end preparer deleted text begin penalties
in deleted text end new text begin penalty is imposed under new text end section 289A.60, subdivision 13. The commissioner may
terminate a tax preparer's authority to transmit returns electronically to the state, if the
commissioner determines the tax preparer engaged in a pattern and practice of violating
this section. Imposition of a penalty under this deleted text begin subdivision deleted text end new text begin paragraph new text end is subject to the
contested case procedure under chapter 14. The commissioner shall collect the penalty in
the same manner as the income tax. new text begin There is no right to make a claim for refund under
section 289A.50 of the penalty imposed under this paragraph. new text end Penalties imposed under this
deleted text begin subdivision deleted text end new text begin paragraph new text end are public data.

new text begin (b) In addition to the penalty under paragraph (a), if the commissioner determines that
a tax preparer has violated or is about to violate subdivision 3 or 5, or section 270C.4451,
the commissioner may issue an administrative order to the tax preparer requiring the tax
preparer to cease and desist from committing the violation. The administrative order may
include an administrative penalty provided in paragraph (a).
new text end

new text begin (c) If the commissioner issues an administrative order under paragraph (b), the
commissioner must send the order to the tax preparer addressed to the last known address
of the tax preparer.
new text end

new text begin (d) A cease and desist order under paragraph (b) must:
new text end

new text begin (1) describe the act, conduct, or practice committed or about to be committed and include
a reference to the law that the act, conduct, or practice violates or would violate; and
new text end

new text begin (2) provide notice that the tax preparer may request a hearing as provided in this
subdivision.
new text end

new text begin (e) Within 30 days after the commissioner issues an administrative order under paragraph
(b), the tax preparer may request a hearing to review the commissioner's action. The request
for hearing must be made in writing and must be served on the commissioner at the address
specified in the order. The hearing request must specifically state the reasons for seeking
review of the order. The date on which a request for hearing is served by mail is the postmark
date on the envelope in which the request for hearing is mailed.
new text end

new text begin (f) If a tax preparer does not timely request a hearing regarding an administrative order
issued under paragraph (b), the order becomes a final order of the commissioner and is not
subject to review by any court or agency.
new text end

new text begin (g) If a tax preparer timely requests a hearing regarding an administrative order issued
under paragraph (b), the hearing must be commenced within ten days after the commissioner
receives the request for a hearing.
new text end

new text begin (h) A hearing timely requested under paragraph (e) is subject to the contested case
procedure under chapter 14, as modified by this subdivision. The administrative law judge
must issue a report containing findings of fact, conclusions of law, and a recommended
order within ten days after the completion of the hearing, the receipt of late-filed exhibits,
or the submission of written arguments, whichever is later.
new text end

new text begin (i) Within five days of the date of the administrative law judge's report issued under
paragraph (h), any party aggrieved by the administrative law judge's report may submit
written exceptions and arguments to the commissioner. Within 15 days after receiving the
administrative law judge's report, the commissioner must issue an order vacating, modifying,
or making final the administrative order.
new text end

new text begin (j) The commissioner and the tax preparer requesting a hearing may by agreement
lengthen any time periods prescribed in paragraphs (g) to (i).
new text end

new text begin (k) An administrative order issued under paragraph (b) is in effect until it is modified
or vacated by the commissioner or an appellate court. The administrative hearing provided
by paragraphs (e) to (i) and any appellate judicial review as provided in chapter 14 constitute
the exclusive remedy for a tax preparer aggrieved by the order.
new text end

new text begin (l) The commissioner may impose an administrative penalty, in addition to the penalty
under paragraph (a), up to $5,000 per violation of a cease and desist order issued under
paragraph (b). Imposition of a penalty under this paragraph is subject to the contested case
procedure under chapter 14. Within 30 days after the commissioner imposes a penalty under
this paragraph, the tax preparer assessed the penalty may request a hearing to review the
penalty order. The request for hearing must be made in writing and must be served on the
commissioner at the address specified in the order. The hearing request must specifically
state the reasons for seeking review of the order. The cease and desist order issued under
paragraph (b) is not subject to review in a proceeding to challenge the penalty order under
this paragraph. The date on which a request for hearing is served by mail is the postmark
date on the envelope in which the request for hearing is mailed. If the tax preparer does not
timely request a hearing, the penalty order becomes a final order of the commissioner and
is not subject to review by any court or agency. A penalty imposed by the commissioner
under this paragraph may be collected and enforced by the commissioner as an income tax
liability. There is no right to make a claim for refund under section 289A.50 of the penalty
imposed under this paragraph. A penalty imposed under this paragraph is public data.
new text end

new text begin (m) If a tax preparer violates a cease and desist order issued under paragraph (b), the
commissioner may terminate the tax preparer's authority to transmit returns electronically
to the state. Termination under this paragraph is public data.
new text end

new text begin (n) A cease and desist order issued under paragraph (b) is public data when it is a final
order.
new text end

new text begin (o) Notwithstanding any other law, the commissioner may impose a penalty or take other
action under this subdivision against a tax preparer, with respect to a return, within the
period to assess tax on that return as provided by section 289A.38.
new text end

new text begin (p) Notwithstanding any other law, the imposition of a penalty or any other action against
a tax preparer under this subdivision, other than with respect to a return, must be taken by
the commissioner within five years of the violation of statute.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for claims and returns filed after December
31, 2017.
new text end

Sec. 5.

Minnesota Statutes 2016, section 270C.445, subdivision 6a, is amended to read:

Subd. 6a.

Exchange of data; State Board of Accountancy.

The State Board of
Accountancy shall refer to the commissioner complaints it receives about tax preparers who
are not subject to the jurisdiction of the State Board of Accountancy and who are alleged
to have violated the provisions of deleted text begin subdivisions 3, 3a, 4, 4a, 4b, 5, and 5b deleted text end new text begin this section, except
subdivision 5a, or section 270C.4451 new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for claims and returns filed after December
31, 2017.
new text end

Sec. 6.

Minnesota Statutes 2016, section 270C.445, subdivision 6b, is amended to read:

Subd. 6b.

Exchange of data; Lawyers Board of Professional Responsibility.

The
Lawyers Board of Professional Responsibility may refer to the commissioner complaints
it receives about tax preparers who are not subject to its jurisdiction and who are alleged to
have violated the provisions of deleted text begin subdivisions 3, 3a, 4, 4a, 4b, 5, and 5b deleted text end new text begin this section, except
subdivision 5a, or section 270C.4451 new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for claims and returns filed after December
31, 2017.
new text end

Sec. 7.

Minnesota Statutes 2016, section 270C.445, subdivision 6c, is amended to read:

Subd. 6c.

Exchange of data; commissioner.

The commissioner shall refer new text begin information
and new text end complaints about tax preparers who are alleged to have violated the provisions of
deleted text begin subdivisions 3, 3a, 4, 4a, 4b, 5, and 5b deleted text end new text begin this section, except subdivision 5a, or section
270C.4451, new text end to:

(1) the State Board of Accountancy, if the tax preparer is under its jurisdiction; and

(2) the Lawyers Board of Professional Responsibility, if the tax preparer is under its
jurisdiction.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for claims and returns filed after December
31, 2017.
new text end

Sec. 8.

Minnesota Statutes 2016, section 270C.445, subdivision 7, is amended to read:

Subd. 7.

Enforcement; civil actions.

(a) Any violation of this section new text begin or section
270C.4451 new text end is an unfair, deceptive, and unlawful trade practice within the meaning of section
8.31. An action taken under this section is in the public interest.

(b) A client may bring a civil action seeking redress for a violation of this section in the
conciliation or the district court of the county in which unlawful action is alleged to have
been committed or where the respondent resides or has a principal place of business.

(c) A court finding for the plaintiff must award:

(1) actual damages;

(2) incidental and consequential damages;

(3) statutory damages of twice the sum of: (i) the tax preparation fees; and (ii) if the
plaintiff violated deleted text begin subdivision 3a, 4, or 5b deleted text end new text begin section 270C.4451, subdivision 1, 2, or 5 new text end , all
interest and fees for a refund anticipation loan;

(4) reasonable attorney fees;

(5) court costs; and

(6) any other equitable relief as the court considers appropriate.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for claims and returns filed after December
31, 2017.
new text end

Sec. 9.

Minnesota Statutes 2016, section 270C.445, subdivision 8, is amended to read:

Subd. 8.

Limited exemptions.

new text begin (a) Except as provided in paragraph (b), new text end the provisions
of deleted text begin this section, except for subdivisions 3a, 4, and 5b, deleted text end new text begin subdivisions 3; 5; 5a; 6, paragraphs
(a) to (n); and 7, new text end do not apply to:

(1) an attorney admitted to practice under section 481.01;

(2) a new text begin registered accounting practitioner, a registered accounting practitioner firm, a
new text end certified public accountant new text begin , new text end or deleted text begin other person who is subject to the jurisdiction of the State
Board of Accountancy deleted text end new text begin a certified public accountant firm, licensed in accordance with chapter
326A new text end ;

(3) an enrolled agent who has passed the special enrollment examination administered
by the Internal Revenue Service; deleted text begin or
deleted text end

(4) deleted text begin anyone deleted text end new text begin a person new text end who provides, or assists in providing, tax preparation services within
the scope of duties as an employee deleted text begin or supervisor deleted text end new text begin under the direction or supervision new text end of a
person who is exempt under this subdivision deleted text begin . deleted text end new text begin ; or
new text end

new text begin (5) a person acting as a supervisor to a tax preparer who is exempt under this subdivision.
new text end

new text begin (b) The provisions of subdivisions 3; 6, paragraphs (a) to (n); and 7, apply to a tax
preparer who would otherwise be exempt under paragraph (a) if the tax preparer has:
new text end

new text begin (1) had a professional license suspended or revoked for cause, not including a failure to
pay a professional licensing fee, by any authority of any state, territory, or possession of
the United States, including a commonwealth, or the District of Columbia, any federal court
of record, or any federal agency, body, or board;
new text end

new text begin (2) irrespective of whether an appeal has been taken, been convicted of any crime
involving dishonesty or breach of trust;
new text end

new text begin (3) been censured, suspended, or disbarred under United States Treasury Department
Circular 230;
new text end

new text begin (4) been sanctioned by a court of competent jurisdiction, whether in a civil or criminal
proceeding, including suits for injunctive relief, relating to any taxpayer's tax liability or
the tax preparer's own tax liability, for:
new text end

new text begin (i) instituting or maintaining proceedings primarily for delay;
new text end

new text begin (ii) advancing frivolous or groundless arguments; or
new text end

new text begin (iii) failing to pursue available administrative remedies; or
new text end

new text begin (5) demonstrated a pattern of willful disreputable conduct by:
new text end

new text begin (i) failing to file a return that the tax preparer was required to file annually for two of
the three immediately preceding tax periods; or
new text end

new text begin (ii) failing to file a return that the tax preparer was required to file more frequently than
annually for three of the six immediately preceding tax periods.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for claims and returns filed after December
31, 2017.
new text end

Sec. 10.

Minnesota Statutes 2016, section 270C.445, is amended by adding a subdivision
to read:

new text begin Subd. 9. new text end

new text begin Powers additional. new text end

new text begin The powers and authority granted in this section are in
addition to all other powers of the commissioner. The use of the powers granted in this
section does not preclude the use of any other power or authority of the commissioner.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for claims and returns filed after December
31, 2017.
new text end

Sec. 11.

Minnesota Statutes 2016, section 270C.446, subdivision 2, is amended to read:

Subd. 2.

Required and excluded tax preparers.

(a) Subject to the limitations of
paragraph (b), the commissioner must publish lists of tax preparers as defined in section
deleted text begin 289A.60, subdivision 13, paragraph (f) deleted text end new text begin 270C.445, subdivision 2, paragraph (h) new text end , who have
been new text begin :
new text end

new text begin (1) new text end convicted under section 289A.63 deleted text begin for returns or claims prepared as a tax preparer or deleted text end new text begin ;
new text end

new text begin (2) new text end assessed penalties in excess of $1,000 under section 289A.60, subdivision 13,
paragraph (a) deleted text begin . deleted text end new text begin ;
new text end

new text begin (3) convicted for identity theft under section 609.527, or a similar statute, for a return
filed with the commissioner, the Internal Revenue Service, or another state;
new text end

new text begin (4) assessed a penalty under section 270C.445, subdivision 6, paragraph (a), in excess
of $1,000;
new text end

new text begin (5) issued a cease and desist order under section 270C.445, subdivision 6, paragraph
(b), that has become a final order; or
new text end

new text begin (6) assessed a penalty under section 270C.445, subdivision 6, paragraph (l), for violating
a cease and desist order.
new text end

(b) For the purposes of this section, tax preparers are not subject to publication if:

(1) an administrative or court action contesting deleted text begin the deleted text end new text begin or appealing a new text end penalty new text begin described in
paragraph (a), clause (2), (4), or (6), new text end has been filed or served and is unresolved at the time
when notice would be given under subdivision 3;

(2) an appeal period to contest deleted text begin the deleted text end new text begin a new text end penalty new text begin described in paragraph (a), clause (2), (4),
or (6), new text end has not expired; deleted text begin or
deleted text end

(3) the commissioner has been notified that the tax preparer is deceased deleted text begin . deleted text end new text begin ;
new text end

new text begin (4) an appeal period to contest a cease and desist order issued under section 270C.445,
subdivision 6, paragraph (b), has not expired;
new text end

new text begin (5) an administrative or court action contesting or appealing a cease and desist order
issued under section 270C.445, subdivision 6, paragraph (b), has been filed or served and
is unresolved at the time when notice would be given under subdivision 3;
new text end

new text begin (6) a direct appeal of a conviction described in paragraph (a), clause (1) or (3), has been
filed or served and is unresolved at the time when the notice would be given under
subdivision 3; or
new text end

new text begin (7) an appeal period to contest a conviction described in paragraph (a), clause (1) or (3),
has not expired.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for claims and returns filed after December
31, 2017.
new text end

Sec. 12.

Minnesota Statutes 2016, section 270C.446, subdivision 3, is amended to read:

Subd. 3.

Notice to tax preparer.

(a) At least 30 days before publishing the name of a
tax preparer subject to deleted text begin penalty deleted text end new text begin publication under this section new text end , the commissioner shall mail
a written notice to the tax preparer, detailing the deleted text begin amount and nature of each penalty deleted text end new text begin basis
for the publication new text end and the intended publication of the information listed in subdivision 4
related to the penalty. The notice must be deleted text begin mailed by first class and certified mail deleted text end new text begin sent to the
tax preparer new text end addressed to the last known address of the tax preparer. The notice must include
information regarding the exceptions listed in subdivision 2, paragraph (b), and must state
that the tax preparer's information will not be published if the tax preparer provides
information establishing that subdivision 2, paragraph (b), prohibits publication of the tax
preparer's name.

(b) Thirty days after the notice is mailed and if the tax preparer has not proved to the
commissioner that subdivision 2, paragraph (b), prohibits publication, the commissioner
may publish in a list of tax preparers subject to penalty the information about the tax preparer
that is listed in subdivision 4.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for claims and returns filed after December
31, 2017.
new text end

Sec. 13.

Minnesota Statutes 2016, section 270C.446, subdivision 4, is amended to read:

Subd. 4.

Form of list.

The list may be published by any medium or method. The list
must contain the name, associated business name or names, address or addresses, and
violation or violations deleted text begin for which a penalty was imposed of deleted text end new text begin that make new text end each tax preparer
subject to deleted text begin penalty deleted text end new text begin publication new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for claims and returns filed after December
31, 2017.
new text end

Sec. 14.

Minnesota Statutes 2016, section 270C.446, subdivision 5, is amended to read:

Subd. 5.

Removal from list.

The commissioner shall remove the name of a tax preparer
from the list of tax preparers published under this section:

(1) when the commissioner determines that the name was included on the list in error;

(2) within deleted text begin 90 days deleted text end new text begin three years new text end after the preparer has demonstrated to the commissioner
that the preparer fully paid all fines new text begin and penalties new text end imposed, served any suspension, satisfied
any sentence imposed, new text begin successfully completed any probationary period imposed, new text end and
successfully completed any remedial actions required by the commissioner, the State Board
of Accountancy, or the Lawyers Board of Professional Responsibility; or

(3) when the commissioner has been notified that the tax preparer is deceased.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for claims and returns filed after December
31, 2017.
new text end

Sec. 15.

Minnesota Statutes 2016, section 270C.447, subdivision 1, is amended to read:

Subdivision 1.

Commencement of action.

new text begin (a) Whenever it appears to the commissioner
that a tax preparer doing business in Minnesota has engaged or is about to engage in any
conduct described in subdivision 2, new text end a civil action in the name of the state of Minnesota may
be commenced to enjoin deleted text begin any person who is a tax return preparer doing business in this state
from further engaging in any conduct described in subdivision 2 deleted text end new text begin the conduct and enforce
compliance new text end .

new text begin (b) new text end An action under this subdivision must be brought by the attorney general in new text begin :
new text end

new text begin (1) new text end the district court for the judicial district of the tax deleted text begin return deleted text end preparer's residence or
principal place of business deleted text begin , or in which the deleted text end new text begin ;
new text end

new text begin (2) the district court for the judicial district of the residence of any new text end taxpayer with respect
to whose deleted text begin tax deleted text end return the action is brought deleted text begin resides deleted text end new text begin ; or
new text end

new text begin (3) Ramsey County District Court new text end .

new text begin (c) new text end The court may exercise its jurisdiction over the action separate and apart from any
other action brought by the state of Minnesota against the tax deleted text begin return deleted text end preparer or any taxpayer. new text begin
The court must grant a permanent injunction or other appropriate relief if the commissioner
shows that the person has engaged in or is about to engage in conduct constituting a violation
of a law administered by the commissioner or a cease and desist order issued by the
commissioner. The commissioner shall not be required to show irreparable harm.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for claims and returns filed after December
31, 2017.
new text end

Sec. 16.

Minnesota Statutes 2016, section 270C.447, subdivision 2, is amended to read:

Subd. 2.

Injunction prohibiting specific conduct.

In an action under subdivision 1, new text begin
the court may enjoin the person from further engaging in that conduct new text end if the court finds that
a tax deleted text begin return deleted text end preparer has:

(1) engaged new text begin or is about to engage new text end in any conduct subject to a civil penalty under section
289A.60 deleted text begin or deleted text end new text begin , new text end a criminal penalty under section 289A.63 new text begin , or a criminal penalty under section
609.527 or a similar statute for a return filed with the commissioner, the Internal Revenue
Service, or another state new text end ;

(2) misrepresented new text begin or is about to misrepresent new text end the preparer's eligibility to practice before
the Department of Revenue, or deleted text begin otherwise deleted text end misrepresented the preparer's experience or
education as a tax deleted text begin return deleted text end preparer;

(3) guaranteed new text begin or is about to guarantee new text end the payment of any tax refund or the allowance
of any tax credit; deleted text begin or
deleted text end

new text begin (4) violated or is about to violate a cease and desist order issued by the commissioner;
or
new text end

deleted text begin (4) deleted text end new text begin (5) new text end engaged new text begin or is about to engage new text end in any other fraudulent or deceptive conduct that
substantially interferes with the proper administration of a law administered by the
commissioner, and injunctive relief is appropriate to prevent the recurrence of that conduct deleted text begin , deleted text end new text begin .
new text end

deleted text begin the court may enjoin the person from further engaging in that conduct.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for claims and returns filed after December
31, 2017.
new text end

Sec. 17.

Minnesota Statutes 2016, section 270C.447, subdivision 3, is amended to read:

Subd. 3.

Injunction prohibiting all business activities.

If the court finds that a tax
deleted text begin return deleted text end preparer has continually or repeatedly engaged in conduct described in subdivision
2, and that an injunction prohibiting that conduct would not be sufficient to prevent the
person's interference with the proper administration of a law administered by the
commissioner, the court may enjoin the person from acting as a tax deleted text begin return deleted text end preparer. The
court may not enjoin the employer of a tax deleted text begin return deleted text end preparer for conduct described in
subdivision 2 engaged in by one or more of the employer's employees unless the employer
was also actively involved in that conduct.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for claims and returns filed after December
31, 2017.
new text end

Sec. 18.

Minnesota Statutes 2016, section 270C.447, is amended by adding a subdivision
to read:

new text begin Subd. 3a. new text end

new text begin Enforcement of cease and desist orders. new text end

new text begin (a) Whenever the commissioner
under subdivision 1 or 3 seeks to enforce compliance with a cease and desist order, the court
must consider the allegations in the cease and desist order conclusively established, regardless
of whether: (1) the order is a final order, (2) a hearing or hearing request on the cease and
desist order is pending, or (3) the time has not yet expired to request a hearing on the cease
and desist order.
new text end

new text begin (b) If the court finds the tax preparer was not in compliance with a cease and desist order,
the court may impose a further civil penalty against the tax preparer for contempt in an
amount up to $10,000 for each violation and may grant any other relief the court determines
is just and proper in the circumstances. A civil penalty imposed by a court under this section
may be collected and enforced by the commissioner as an income tax liability.
new text end

new text begin (c) The court may not require the commissioner to post a bond in an action or proceeding
under this section.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for claims and returns filed after December
31, 2017.
new text end

Sec. 19.

Minnesota Statutes 2016, section 289A.60, subdivision 13, is amended to read:

Subd. 13.

Penalties for tax deleted text begin return deleted text end preparers.

(a) If an understatement of liability with
respect to a return or claim for refund is due to a reckless disregard of laws and rules or
willful attempt in any manner to understate the liability for a tax by a person who is a tax
deleted text begin return deleted text end preparer with respect to the return or claim, the person shall pay to the commissioner
a penalty of $500. If a part of a deleted text begin property tax refund deleted text end claim new text begin filed under section 290.0677,
subdivision 1, or chapter 290A new text end is excessive due to a reckless disregard or willful attempt
in any manner to overstate the claim deleted text begin for relief deleted text end allowed deleted text begin under chapter 290A deleted text end by a person who
is a tax deleted text begin refund or return deleted text end preparer, the deleted text begin person deleted text end new text begin tax preparer new text end shall pay to the commissioner a
penalty of $500 with respect to the claim. These penalties may not be assessed against the
employer of a tax deleted text begin return deleted text end preparer unless the employer was actively involved in the reckless
disregard or willful attempt to understate the liability for a tax or to overstate the claim for
refund. These penalties are income tax liabilities and may be assessed at any time as provided
in section 289A.38, subdivision 5.

(b) A civil action in the name of the state of Minnesota may be commenced to enjoin
any person who is a tax deleted text begin return deleted text end preparer doing business in this state as provided in section
270C.447.

(c) The commissioner may terminate or suspend a tax preparer's authority to transmit
returns electronically to the state, if the commissioner determines that the tax preparer has
engaged in a pattern and practice of conduct in violation of paragraph (a) of this subdivision
or has been convicted under section 289A.63.

(d) For purposes of this subdivision, the term "understatement of liability" means an
understatement of the net amount payable with respect to a tax imposed by state tax law,
or an overstatement of the net amount creditable or refundable with respect to a tax. The
determination of whether or not there is an understatement of liability must be made without
regard to any administrative or judicial action involving the taxpayer. For purposes of this
subdivision, the amount determined for underpayment of estimated tax under either section
289A.25 or 289A.26 is not considered an understatement of liability.

(e) For purposes of this subdivision, the term "overstatement of claim" means an
overstatement of the net amount refundable with respect to a claim deleted text begin for property tax relief
provided by deleted text end new text begin filed under section 290.0677, subdivision 1, or new text end chapter 290A. The determination
of whether or not there is an overstatement of a claim must be made without regard to
administrative or judicial action involving the claimant.

(f) For purposes of this section, the term deleted text begin "tax refund or return preparer" deleted text end deleted text begin means an
individual who prepares for compensation, or who employs one or more individuals to
prepare for compensation, a return of tax, or a claim for refund of tax. The preparation of
a substantial part of a return or claim for refund is treated as if it were the preparation of
the entire return or claim for refund. An individual is not considered a tax return preparer
merely because the individual:
deleted text end

deleted text begin (1) gives typing, reproducing, or other mechanical assistance;
deleted text end

deleted text begin (2) prepares a return or claim for refund of the employer, or an officer or employee of
the employer, by whom the individual is regularly and continuously employed;
deleted text end

deleted text begin (3) prepares a return or claim for refund of any person as a fiduciary for that person; or
deleted text end

deleted text begin (4) prepares a claim for refund for a taxpayer in response to a tax order issued to the
taxpayer. deleted text end new text begin "tax preparer" or "preparer" has the meaning given in section 270C.445, subdivision
2, paragraph (h).
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for claims and returns filed after December
31, 2017.
new text end

Sec. 20.

Minnesota Statutes 2016, section 289A.60, subdivision 28, is amended to read:

Subd. 28.

Preparer identification number.

deleted text begin Any Minnesota individual income tax return
or claim for refund prepared by a "tax refund or return preparer" as defined in subdivision
13, paragraph (f), shall bear the identification number the preparer is required to use federally
under section 6109(a)(4) of the Internal Revenue Code. deleted text end new text begin (a) Each of the following that is
prepared by a tax preparer must include the tax preparer's tax identification number:
new text end

new text begin (1) a tax return required to be filed under this chapter;
new text end

new text begin (2) a claim filed under section 290.0677, subdivision 1, or chapter 290A; and
new text end

new text begin (3) a claim for refund of an overpayment.
new text end

new text begin (b) A tax preparer is not required to include their preparer tax identification number on
a filing if the number is not required in the forms or filing requirements provided by the
commissioner.
new text end

new text begin (c) new text end A tax deleted text begin refund or return deleted text end preparer who deleted text begin prepares a Minnesota individual income tax
return or claim for refund and deleted text end fails to include the deleted text begin required deleted text end new text begin preparer tax identification new text end number
deleted text begin on the return or claim deleted text end new text begin as required by this section new text end is subject to a penalty of $50 for each
failure.

new text begin (d) A tax preparer who fails to include the preparer tax identification number as required
by this section, and who is required to have a valid preparer tax identification number issued
under section 6109(a)(4) of the Internal Revenue Code, but does not have one, is subject to
a $500 penalty for each failure. A tax preparer subject to the penalty in this paragraph is
not subject to the penalty in paragraph (c).
new text end

new text begin (e) For the purposes of this subdivision, "tax preparer" has the meaning given in section
270C.445, subdivision 2, paragraph (h), and "preparer tax identification number" means
the number the tax preparer is required to use federally under section 6109(a)(4) of the
Internal Revenue Code.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for claims and returns filed after December
31, 2017.
new text end

Sec. 21. new text begin REVISOR'S INSTRUCTION.
new text end

new text begin (a) The revisor of statutes shall renumber the provisions of Minnesota Statutes listed in
column A to the references listed in column B.
new text end

	new text begin Column A new text end	new text begin Column B new text end
	new text begin 270C.445, subdivision 3a new text end	new text begin 270C.4451, subdivision 1 new text end
	new text begin 270C.445, subdivision 4 new text end	new text begin 270C.4451, subdivision 2 new text end
	new text begin 270C.445, subdivision 4a new text end	new text begin 270C.4451, subdivision 3 new text end
	new text begin 270C.445, subdivision 4b new text end	new text begin 270C.4451, subdivision 4 new text end
	new text begin 270C.445, subdivision 5b new text end	new text begin 270C.4451, subdivision 5 new text end

new text begin (b) The revisor shall make necessary cross-reference changes in Minnesota Statutes and
Minnesota Rules consistent with the renumbering of Minnesota Statutes, section 270C.445,
subdivisions 3a, 4, 4a, 4b, and 5b.
new text end

new text begin (c) The revisor shall publish the statutory derivations of the laws renumbered in this act
in Laws of Minnesota and report the derivations in Minnesota Statutes.
new text end

new text begin (d) If Minnesota Statutes, section 270C.445, subdivisions 3a, 4, 4a, 4b, and 5b, are further
amended in the 2017 legislative session, the revisor shall codify the amendments in a manner
consistent with this act. The revisor may make necessary changes to sentence structure to
preserve the meaning of the text.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 22. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2016, sections 270C.445, subdivision 1; and 270C.447, subdivision
4, new text end new text begin are repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for claims and returns filed after December
31, 2017.
new text end

APPENDIX

Repealed Minnesota Statutes: 17-3713

270C.445 TAX PREPARATION SERVICES.

Subdivision 1.

Scope.

This section applies to a person who provides tax preparation services, except:

(1) a person who provides tax preparation services for fewer than ten clients in a calendar year;

(2) a person who provides tax preparation services only to immediate family members. For the purposes of this section, "immediate family members" means a spouse, parent, grandparent, child, or sibling;

(3) an employee who prepares a tax return for an employer's business;

(4) any fiduciary, or the regular employees of a fiduciary, while acting on behalf of the fiduciary estate, testator, trustor, grantor, or beneficiaries of them; and

(5) nonprofit organizations providing tax preparation services under the Internal Revenue Service Volunteer Income Tax Assistance Program or Tax Counseling for the Elderly Program.

270C.447 LEGAL ACTION TO ENJOIN TAX RETURN PREPARER.

Subd. 4.

Tax return preparer.

For purposes of this section, the term "tax return preparer" means an individual who prepares for compensation, or who employs one or more individuals to prepare for compensation, a return of tax or a claim for refund of tax. The preparation of a substantial part of a return or claim for refund is treated as if it were the preparation of the entire return or claim for refund. An individual is not considered a tax return preparer merely because the individual:

(1) gives typing, reproducing, or other mechanical assistance;

(2) prepares a return or claim for refund of the employer, or an officer or employee of the employer, by whom the individual is regularly and continuously employed;

(3) prepares a return or claim for refund of any person as a fiduciary for that person; or

(4) prepares a claim for refund for a taxpayer in response to a tax order issued to the taxpayer.