An Act Concerning Tax Preparer Liability For Underpaid Income Tax.
This legislation would significantly alter the relationship between tax preparers and their clients by introducing a new layer of liability for tax preparers. This shift aims to protect taxpayers from financial burden caused by preparer mistakes, ensuring that they are not held responsible for errors made outside of their control. If enacted, it could lead to a more cautious approach among tax preparers, as they would be incentivized to perform more thorough and careful work to avoid penalties and liabilities.
SB00814, known as 'An Act Concerning Tax Preparer Liability for Underpaid Income Tax,' seeks to hold tax preparers more accountable for errors that lead to underpayment of income tax by taxpayers. The bill mandates that when a taxpayer underpays due to an error by a tax preparer, it is the responsibility of the tax preparer to file an amended return at no cost to the taxpayer. Furthermore, the bill stipulates that preparers will be liable for any additional taxes, penalties, or interest that arise from the incorrect tax filings.
There are notable points of contention regarding SB00814. Supporters argue that the bill enhances taxpayer protections and accountability, allowing individuals to seek recourse when tax preparers make costly errors. Critics, however, may express concern over the potential increase in fees for tax preparation services, predicting that tax preparers may raise costs to offset their new liabilities. Additionally, there are apprehensions regarding the feasibility of enforcing this liability and how it might affect the overall quality of tax preparation services available to the public.