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David J. Silverman, EA Chairman,
Government Relations and Legislative Affairs Committee
David J. Silverman, EA can be reached at: djs@silvermanstaxadvice.net
S5710A passed in the Senate June 7, 2010 (VOTE RESULTS: 58 - 0). The Assembly has already passed the bill and accordingly will send the bill to Governor David Paterson for his signature. The governor is expected to sign the bill, particularly given the strong legislative support for it.
From May 26, 2010
IMPORTANT: Click
here for a sample letter that can be used to send your State
Senator and
Assemblyman/woman. Urge them to support S5710-A and A8556-A
,which will
exempt Enrolled Agents from having to register with the NYS
Department
of Taxation and Finance as income tax return preparers.
You can obtain the name and address of your
Senator and Assemblyperson by going to the link below:
http://assembly.state.ny.us/mem/
From April 28, 2010
Senator Carl Kruger, Chairman of the Senate Finance Committee, honored the commitment he made to me (David Silverman, EA) that he would sponsor and introduce corrective legislation exempting Enrolled Agents from registration as tax return preparers.
Senate 5710-A (click here) recently introduced by Senator Kruger amends S-5710 which exempts CPAs regardless of their jurisdiction from registration would now exempt Enrolled Agents and their employees from registration when enacted.
There is an Assembly version, A8556-A, sponsored by fellow EA Bill Stevenson's client, Assemblyman David McDonough that is now in conformity with S5710-A with both bills exempting Enrolled Agents and their employees from registration.
As far as the NYSSEA legal case to have the registration law declared unconstitutional - not word yet. The judge has a back log of about 1,200 cases!
_____________________________________________________
From February 16, 2011
The
oral argument in our lawsuit to have the registration requirement by
Enrolled Agents with the tax department declared unconstitutional
because it violates the equal protection clause was held before
Judge Marcy S. Freidman, a very bright and no-nonsense judge, on
January 28, 2010.
The Assistant Attorney General (AAG) representing the state spoke
first. He went into a dissertation of why registration was
needed and started describing who Enrolled Agents are. After a
minute or two the judge cut him off. She informed him that the
issue before the court is preemption (do federal regulations dealing
with Enrolled Agents preempt the state from enacting legislation
regulating or taxing them). The judge then asked if there were
any court cases dealing with this. In reply the AAG mentioned
at length a California case, but concluded it didn’t exactly deal
with the issue. The judge rolled her eyes and then asked our
attorney, Arthur Rosen, to speak.
Rosen went to the heart of preemption and cited a number of cases in
our favor, two of them NY cases. Then he briefed Judge Friedman on
how entwined federal and state tax laws are. That a NYS tax
return cannot accurately be prepared unless the preparer is
knowledgeable in what items of income and deductions were properly
included in the federal return. Then Rosen stressed how
arbitrary the law is. That by way of example he informed Judge
Friedman that the NYS Consumer Bill of Rights dealing with income
tax preparers exempts Enrolled Agents because the state realized
that it cannot regulate us. As he spoke the judge listened
attentively. Like they do on TV, I wish I could tell you what
all this body language meant. Unfortunately, I can’t.
The AAG made a big deal out of IRC Section 6103(k)(5) (Disclosure of
Tax Returns) which permits the IRS to disclose tax return
information to state agencies that regulate tax return preparers.
The AAG intimated that the IRC, therefore, grants states the right
to regulate tax return preparers. Rosen responded as he did in
his prior brief that the right to disclose is not the right to
regulate.
Because the law changed in December exempting CPAs and attorneys in
any jurisdiction from registration Judge Freidman asked each side to
submit a brief within two weeks on this issue. Then Friedman
announced that she hadn’t reached a decision one way or another.
After the judge gets the briefs Rosen anticipates a decision in 3-6
weeks.
David
J. Silverman, EA
Chairman,
Government Relations Committee
________________________________________________________
From January 28, 2010
Dear
Members:
I just got back from the oral argument before Judge Marcy S.
Freidman, a very bright and no-nonsense judge. There were 20
cases before ours.
The Assistant Attorney General (AAG) representing the state spoke
first. He went into a dissertation of why registration was
needed and started describing who Enrolled Agents are. After a
minute or two the judge cut him off. She informed him that the
issue before the court is preemption (do federal regulations dealing
with Enrolled Agents preempt the state from enacting legislation
regulating or taxing them). The judge then asked if there were
any court cases dealing with this. In reply the AAG mentioned
at length a California case, but concluded it didn’t exactly deal
with the issue. The judge rolled her eyes and then asked our
attorney, Arthur Rosen, to speak.
Rosen went to the heart of preemption and cited a number of cases in
our favor, two of them NY cases. Then he briefed Judge Friedman on
how entwined federal and state tax laws are. That a NYS tax
return cannot accurately be prepared unless the preparer is
knowledgeable in what items of income and deductions were properly
included in the federal return. Then Rosen stressed how
arbitrary the law is. That by way of example he informed Judge
Friedman that the NYS Consumer Bill of Rights dealing with income
tax preparers exempts Enrolled Agents because the state realized
that it cannot regulate us. As he spoke the judge listened
attentively. Like they do on TV, I wish I could tell you what
all this body language meant. Unfortunately, I can’t.
Because the law changed in December exempting CPAs and attorneys in
any jurisdiction from registration Judge Freidman asked each side to
submit a brief within two weeks on this issue. Then Friedman
announced that she hadn’t reached a decision one way or another.
After the judge gets the briefs Rosen anticipates a decision in 3-6
weeks.
--
David J. Silverman
_______________________________________________________________
From December 9, 2009
INCOME TAX PREPARER REGISTRATION
It is our sad duty to report that S66023 which passed the Assembly and the Senate and sent to the Governor on December 2nd only contained a provision favorable to attorneys and CPAs. The bill eliminated the requirement that attorneys and CPAs not licensed in NY must register as tax return preparers.
As a result all CPAs and attorneys are exempt
from registration.
Despite all David J. Silverman, EA Chair, of NYSSEAs Government
Relations Committee was promised by Senator Kruger's office,
Chairman of the Senate Finance Committee, the Enrolled Agent
exemption NYSSEA put forth never made it into the bill.
Unless Assemblyman David McDonough, who sponsored a bill that only
passed in the Assembly that would have repealed the registration
requirement, can pull something out of the hat then we have to wait
for the outcome of our court case.
The oral argument in our lawsuit to have the tax return preparer
registration requirement as it pertains to Enrolled Agents declared
unconstitutional is scheduled for January 28th in the Supreme Court,
New York County.
Contributions to NYSSEAs legal defense fund are desperately needed. Send donations to:
Victoria A. McGinn, President, NYSSEA
38 Vautrin Avenue
Holtsville,
NY 11742
Go to the following NYS Department of Taxation web link for further
information on the registration process:
http://www.tax.state.ny.us/tp/tpreg.htm
_____________________________________________________________________________
From October 2009
NYSSEA sponsored a bill that passed in the Assembly (A09028) that recalls the registration requirement. The driving force behind accomplishing this was William Stevenson, EA - Merrick, NY. His client, Assemblyman David McDonough, 19th Assembly District - L.I., sponsor of the bill will be NYSSEA's keynote speaker at the NYSSEA Annual Convention in Albany on October 25th.
The Senate version (S6117) mandating a recall of the registration requirement was scheduled to go to the Senate floor for a vote, but due to the Senate impasse over which political party controlled the Senate the bill never made it that far so it could be acted on. The chairman of this committee stayed up until 2 in the morning watching a live Webcast feed from the Senate floor on September 10th to monitor if S6117 would be voted on. It is problematic if the Senate will meet again before the end of the year. We expect Assemlyman McDonough to brief us as to the likelihood of passage of the legislation either by the end of the year or in next years session. S6117 has the backing of the governor, the NYS Department of Taxation and Finance, the Chairman of the Senate Finance Committee and the Senate Majority Leader.
In the meantime NYSSEA has a lawsuit pending in the Supreme Court, New York County to have the registration law declared unconstitutional based on the U.S. Supreme Court Sperry case which mandates that no state can hinder a federal license granted by an act of Congress. Legal briefs have been filed. The next step is the oral argument before the judge. Hopefully there could be a decision as early as 30 days after that.
NOTE: Until one of the above accomplishes its intended solution Enrolled Agents have to register with the state.
Go to the following NYS Department of Taxation web link for further
information on the registration process:
http://www.tax.state.ny.us/tp/tpreg.htm
Contributions to NYSSEAs legal defense fund are desperately needed.
Contributors to the fund will have their names included on NYSSEA's
Web Site honor roll of members who have graciously provided financial
support with our legal battle.
David J. Silverman, EA - NYC
Chairman, Government Relations Committee
David J. Silverman, EA
866 U.N. Plaza S-415
New York, NY 10017-1822
212-752-6983 (phone)
212-758-5478 (fax)
djs@silvermanstaxadvice.net
UPDATE - JUNE 24, 2009
THE EA BILL TO BE INCLUDED WITH CPAs AND ATTORNEYS IN THE EXEMPTION FROM REGISTRATION PASSED THE ASSEMBLY IN JUNE 2009.
Instead
of passing his SPECIFIC bill, it was included in a 'Budget Clean-up' bill. David
said it was debated on the floor Wednesday night. The chairman of Ways and Means
told him not to worry that he was solving the issue another way as it will be
included in the aforementioned Budget Clean-up bill.
Assemblyman McDonough, our Champion of EA's, said that he was very impressed
with our letter writing campaign in substance and in numbers. Those letters made
a big difference not only from New Yorkers but from other states as well. He
plans to respond to everyone who wrote a letter.
On this day, we are witness to what is almost a legislative miracle considering
the short period of time we had to accomplish this Herculean task.
Thank
you, one and all, for your trust and support.
Bill Stevenson, EA
David J Silverman, EA
Previous Legislative News
NYS Tax Preparer Registration
As most of you know, NYS passed their Budget Bill and instituted
registration of tax preparers, other than CPA's, Public Accountants,
and Attorneys, which requires a $100 fee for this registration in
addition to including us with unlicensed commercial tax preparers.
We feel that we, as EA's who are federally licensed, should also be
exempt from this registration. One of our members has been
working on our behalf with NYS Assemblyman David McDonough, who is
the only one championing our cause at this time, and he has
asked for letters to use as ammunition to show statewide
support.
We need you to write a letter and mail it to:
Assemblyman David G. McDonough
404 Bedford Avenue
Bellmore, NY 11710
A sample letter has been put on the NYSSEA
website for your use. Click below to get the letter:
Letter to Assemblyman David G. McDonough
To personalize the letter:
Please
click on the address box at the upper left side and replace what is
there with your information, type your name on the bottom of the
letter, print it out,
sign it and mail it.
Also, please send a short fax to Mr. McDonough at:
516-409-2073.
Or
e-mail to:
This is very important to NYS EAs as well as EAs all over
the country.
PLEASE DO THIS TODAY
From May 2009:
Enrolled Agents Must Register With The
State,
The NYS legislation seeking to balance it’s out of control budget chose to turn Enrolled Agents into a source of revenue by including in the recently enacted Budget Bill a provision, Section 32 of the New York State Tax Law, which requires Enrolled Agents and their employees who prepare NYS tax returns to register with the NYS Department of Taxation and Finance and pay an annual $100 registration fee. The legislation also requires the Tax Department to convene a task force for the purpose of making recommendations to regulate “tax return preparers” which now includes Enrolled Agents in that unenviable category. The report is due by March 31, 2012. Based on those recommendations the Commissioner is empowered to promulgate regulations governing the behavior and qualifications among other issues regarding ‘tax return preparers”
CPAs and attorneys are exempted from registration. The forces sponsoring this legislation somehow believed that Enrolled Agents being no better than any unlicensed backstreet tax return preparer or refund mill operator should not, along with CPAs and attorneys, be exempt from registration.
Your society did not take this turn of events lying down. Despite this committee’s lobbying efforts which regrettably were unsuccessful your society is confronting the new law on two fronts.
Assemblyman, David G. McDonough (R), 19th Assembly District, L.I., at the urging of William Stevenson, EA (Merrick, NY – Nassau/ Suffolk Chapter) is about to introduce corrective legislation. The membership will be advised of the bill number so they can write their state Senator and Assembly member urging their support, and the firm of McDermott Will & Emery in Manhattan was engaged to start an action in NYS Supreme Court, NY County to have the law declared unconstitutional. The basis for the lawsuit is the constitutional doctrine enunciated in Sperry v. Florida, 373 U.S. Supreme Court 379 (1963).
In Sperry the U.S. Supreme Court clearly and unambiguously ruled that a state:
“may not enforce licensing requirements which, though valid in the absence of federal regulation, give ‘the State’s licensing board a virtual power of review over the federal determination’ that a person or agency is qualified and entitled to perform certain functions, or which impose upon the performance of activity sanctioned by the federal license additional conditions not contemplated by Congress.”
The summons and complaint have been prepared. Prior to
commencing the litigation copies were sent to the Asst. Commissioner and Counsel
to the tax department in
The NYSSEA Web Site and special emails will keep you apprised of our progress and of the help you can offer which is desperately needed.
Address questions to David J. Silverman, EA at david@silvermanstaxadvice.net
