RÉSUMÉ DIGEST
ACT 526 (SB 238) 2018 Regular Session Morrell
New law authorizes the secretary of the Dept. of Revenue (DOR) to file suit to enjoin a
preparer from further engaging in any prohibited conduct.
New law establishes the following 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 DOR without the permission of
the taxpayer.
(4)Engagement in any conduct subject to any criminal penalty provided by Title 47 of
the La. Revised Statutes of 1950.
(5)Engagement in any other fraudulent or deceptive conduct that substantially interferes
with the proper administration of the tax laws of the state.
New 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.
New 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 Internal Revenue Service (IRS) as frivolous.
New 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.
New law authorizes a court to enjoin a preparer from preparing any return, report, claim for
refund, or other claim if the court finds a preparer has engaged in any listed conduct and 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.
New 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.
New law defines a "preparer" as any of the following:
(1)Any person who prepares any return, report, claim for refund or other claim that is
filed with the secretary of the DOR.
(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 secretary of 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 the secretary of the DOR and does not sign as the
preparer, but rather has the taxpayer sign as if the return, report or claim were
self-prepared.
New law excludes from the definition of "preparer" any of the following:
(1)Any employee who prepares a return, report, claim for refund, or other claim for the
employer by whom he is regularly and continuously employed.
(2)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)