RDCSB238 416 2604
DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
SB 238 Engrossed 2018 Regular Session Morrell
Proposed law authorizes the secretary of revenue to file suit to enjoin a preparer from further
engaging in any prohibited conduct.
Proposed law establishes a list of prohibited conduct for preparers.
(1)Preparation of any return or claim for refund that includes a substantial
understatement of a taxpayer's liability due to a frivolous or fraudulent position.
(2) Preparation of any return or claim for refund that includes an understatement of a
taxpayer's liability due to willful or reckless conduct.
(3)Negotiation of a check issued to a taxpayer by the Department of Revenue without
the permission of the taxpayer.
(4)Engagement in any conduct subject to any criminal penalty provided by Title 47 of
the Louisiana Revised Statutes of 1950.
(5)Misrepresentation of the preparer's eligibility to practice before the Department of
Revenue or otherwise misrepresented the preparer's experience or education.
(6)Guaranteeing the payment of any tax refund or the allowance of any tax credit.
(7)Engagement in any other fraudulent or deceptive conduct that substantially interferes
with the proper administration of the tax laws of the state of Louisiana.
Proposed law authorizes a court to enjoin a preparer from preparing any return, report, claim
for refund, or other claim if the court finds that an injunction prohibiting the conduct will not
be sufficient to prevent the preparer from interfering with the administration of the state's
tax laws.
Proposed law provides that suspension from practice before the IRS or another state
establishes a prima facie case for a court to enjoin a paid preparer from preparing tax returns
in La.
Proposed law defines a "substantial understatement" as the understatement of the amount
of tax payable or the overstatement if the amount of tax creditable or refundable exceeds the
greater of 10% of the tax required to be shown for the taxable period on the return or $1,000.
Proposed law defines "frivolous position" as any position that is knowingly advanced in bad
faith, is patently improper, reflects a desire to delay or impede the administration of state tax
laws by using unreasonable, baseless, unsubstantiated or questionable facts or is identified
by the I.R.S. as frivolous.
Proposed law defines "fraudulent position" as any position taken with the intent to evade
taxes or that is a willful attempt to defraud or evade taxes that are due.
Proposed law defines a "preparer" as any of the following:
(1)Any person who prepares, for compensation, any return, report, claim for refund or
other claim that is filed with the secretary of the DOR.
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(2)Any person who owns or operates a business, the primary activity of which is the
preparation of any return, report, claim for refund, or other claim that is filed with
the DOR, and employs one or more persons in such business.
(3)Any person who prepares a substantial portion of a return, report, claim for refund,
or other claim that is filed with DOR and does not sign as the preparer, but rather has
the taxpayer sign as if the return, report or claim were self-prepared.
Proposed law excludes from the definition of "preparer", any employee who prepares a
return, report, claim for refund, or other claim for the employer by whom he is regularly and
continuously employed or an attorney or other tax advisor whose association with a return,
report, claim for refund, or other claim is limited to rendering advice and is not otherwise
involved in preparing the return, report, claim for refund, or other claim for which the advice
was rendered.
Effective July 1, 2018.
(Adds R.S. 47:1574.2)
Summary of Amendments Adopted by Senate
Committee Amendments Proposed by Senate Committee on Revenue and Fiscal
Affairs to the original bill
1. Applies to preparers of any return, report, claim for refund, or other claim.
2. Provides definition of "preparer".
3. Changes effective date to July 1, 2018.
Summary of Amendments Adopted by House
The Committee Amendments Proposed by House Committee on Ways and Means to the
engrossed bill:
1. Change the act that could result in the secretary seeking an injunction from the
court from a return that includes an understatement of a taxpayer's liability due
to an unreasonable position to a substantial understatement of a taxpayer's
liability due to a frivolous or fraudulent position.
2. Delete the definition for "unreasonable position" and add definitions for
"substantial understatement", "frivolous position", and "fraudulent position".
3. Delete conduct which may result in the secretary seeking an injunction from the
court such as failing to provide a copy of a return, failing to sign a return, failing
to provide an identifying number, and failing to retain records.
4. Delete authority for a court to enjoin a party from acting as a preparer if the
court finds the preparer has continually or repeatedly engaged in conduct that
prevents the person's interference with the proper administration of tax laws in
this state.
5. Clarify the definition of "paid preparer" and exclude from the definition
employees regularly and continuously employed to prepare returns or attorneys
or other tax advisors whose association with a return is limited to rendering
advice to a taxpayer or preparer and not otherwise involved in preparing the
return for which advice was rendered.
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