EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
*hb0452*
HOUSE BILL 452
C3, Q7 4lr1796
CF 4lr2992
By: The Speaker (By Request – Office of the Comptroller)
Introduced and read first time: January 22, 2024
Assigned to: Ways and Means
A BILL ENTITLED
AN ACT concerning 1
Individual Tax Preparers – Code of Ethics, Notification of Actions, Enforcement, 2
and Penalties 3
(Stop Scam Tax Preparers Act) 4
FOR the purpose of requiring the State Board of Individual Tax Preparers, on or before a 5
certain date, to publish on the Board’s website a certain code of ethics and certain 6
rules of professional conduct; requiring the Board to notify the Comptroller within a 7
certain period of time of certain actions for violations of provisions of law governing 8
individual tax preparers; requiring the Board to notify the Field Enforcement 9
Bureau of the Comptroller’s Office of certain alleged violations within a certain 10
period of time; granting certain employees of the Bureau certain powers, duties, and 11
responsibilities for enforcing laws pertaining to income tax preparation; requiring 12
the Comptroller to notify the Board within a certain period of time if the Comptroller 13
prohibits an income tax return preparer from submitting income tax returns 14
electronically; prohibiting an income tax return preparer from preparing, assisting 15
in preparing, or causing the preparation of an income tax return or claim for refund 16
in a certain manner; requiring certain fines imposed under this Act to be paid to the 17
Tax Clinics for Low–Income Marylanders Fund; and generally relating to income tax 18
preparation. 19
BY repealing and reenacting, without amendments, 20
Article – Business Occupations and Professions 21
Section 21–205(b)(1) 22
Annotated Code of Maryland 23
(2018 Replacement Volume and 2023 Supplement) 24
BY adding to 25
Article – Business Occupations and Professions 26
Section 21–205(c) 27
Annotated Code of Maryland 28
(2018 Replacement Volume and 2023 Supplement) 29 2 HOUSE BILL 452
BY repealing and reenacting, with amendments, 1
Article – Business Occupations and Professions 2
Section 21–206 and 21–401 3
Annotated Code of Maryland 4
(2018 Replacement Volume and 2023 Supplement) 5
BY repealing and reenacting, without amendments, 6
Article – Tax – General 7
Section 1–207(b) and (c) 8
Annotated Code of Maryland 9
(2022 Replacement Volume and 2023 Supplement) 10
BY repealing and reenacting, with amendments, 11
Article – Tax – General 12
Section 1–207(f), 2–107(a)(2)(ii), 10–824, and 13–1004 13
Annotated Code of Maryland 14
(2022 Replacement Volume and 2023 Supplement) 15
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 16
That the Laws of Maryland read as follows: 17
Article – Business Occupations and Professions 18
21–205. 19
(b) In addition to any duties set forth elsewhere, the Board shall: 20
(1) adopt rules of professional conduct as appropriate to establish a high 21
standard of integrity and dignity for the practice of individual tax preparation; 22
(C) ON OR BEFORE JANUARY 1, 2026, THE BOARD SHALL PUBLISH ON THE 23
BOARD’S WEBSITE A CODE OF ETHICS AND RULES OF PROFESSIONAL CONDUCT FOR 24
ENGAGING IN THE PRACTICE OF I NDIVIDUAL TAX PREPAR ATION. 25
21–206. 26
(a) The Board may investigate a complaint that alleges a violation of this title. 27
(b) On receipt of the results of an investigation made under this section, the Board 28
shall promptly take action that is appropriate under this title to ensure compliance with 29
this title. 30
(c) (1) If the Board concludes that conduct alleged to be in violation of this title 31
will result in harm to a resident of the State, the Board may seek a permanent or temporary 32
injunction with respect to the conduct from the circuit court of the county in which the 33
alleged violation occurs. 34 HOUSE BILL 452 3
(2) In seeking an injunction under this subsection, the Board is not 1
required to: 2
(i) post bond; 3
(ii) allege or prove that an adequate remedy at law does not exist; or 4
(iii) allege or prove that substantial or irreparable damage would 5
result from the continued violation. 6
(3) IF THE BOARD SEEKS AN INJUNCTION OR TAKES A DISCIPLINARY 7
ACTION AGAINST AN IN DIVIDUAL FOR A VIOLA TION OF THIS TITLE , THE BOARD 8
SHALL NOTIFY THE COMPTROLLER WITHIN 5 BUSINESS DAYS AFTER TAKING THE 9
ACTION. 10
[(3)] (4) A member of the Board may not be held personally liable for 11
action taken under this subsection in good faith with reasonable grounds. 12
(d) The Board, or a hearing officer designated by the Board, may administer 13
oaths, hold hearings, and take testimony about all matters within the jurisdiction of the 14
Board. 15
(e) (1) The Board or its designee may issue a subpoena for the attendance of a 16
witness to testify or the production of evidence in connection with: 17
(i) a disciplinary action brought under this title; or 18
(ii) a proceeding brought for an alleged violation of this title. 19
(2) If an individual fails to comply with a subpoena issued under this 20
subsection, on petition of the Board, a court of competent jurisdiction may compel 21
compliance with the subpoena. 22
21–401. 23
(a) Except as otherwise provided in this title, an individual may not provide, 24
attempt to provide, or offer to provide individual tax preparation services in the State 25
unless registered by the Board. 26
(b) Except as otherwise provided in this title, a person may not employ an 27
individual to provide, attempt to provide, or offer to provide individual tax preparation 28
services in the State unless the individual is registered by the Board. 29
4 HOUSE BILL 452
(C) THE BOARD SHALL NOTIFY THE FIELD ENFORCEMENT BUREAU OF THE 1
COMPTROLLER ’S OFFICE OF AN ALLEGED VIOLAT ION OF THIS SECTION WITHIN 5 2
BUSINESS DAYS AFTER RECEIPT OF THE ALLEGATION. 3
Article – Tax – General 4
1–207. 5
(b) There is a Tax Clinics for Low–Income Marylanders Fund. 6
(c) The purpose of the Fund is to provide grants to the University of Maryland 7
School of Law, the University of Baltimore School of Law, and the Maryland Volunteer 8
Lawyers Service to operate tax clinics for low–income Maryland residents. 9
(f) The Fund consists of: 10
(1) proceeds distributed to the Fund under § 17–317 of the Commercial 11
Law Article; 12
(2) FINES DISTRIBUTED TO THE FUND UNDER § 13–1004(C) OF THIS 13
ARTICLE; 14
(3) money appropriated in the State budget for the Fund; and 15
[(3)] (4) any other money from any other source accepted for the benefit 16
of the Fund. 17
2–107. 18
(a) Authorized employees of the Field Enforcement Bureau of the Comptroller’s 19
Office: 20
(2) have all the powers, duties, and responsibilities of a peace officer for the 21
purpose of enforcing the laws pertaining to: 22
(ii) income tax AND INCOME TAX PREPARATION ; 23
10–824. 24
(a) (1) In this section the following words have the meanings indicated. 25
(2) (i) “Income tax return preparer” means a person who for 26
compensation prepares a substantial portion or more of a qualified return or employs one 27
or more persons to prepare for compensation a substantial portion or more of a qualified 28
return. 29
HOUSE BILL 452 5
(ii) “Income tax return preparer” does not include a person who 1
merely performs those acts described under § 7701(a)(36)(B) of the Internal Revenue Code. 2
(3) “Qualified return” means any original return of individual income tax 3
imposed by this title, regardless of whether a tax is due or a refund is claimed. 4
(b) Except as otherwise provided in this section, an income tax return preparer 5
shall file all qualified returns that the income tax return preparer prepares by electronic 6
means as prescribed by the Comptroller if: 7
(1) for a taxable year beginning after December 31, 2008, but before 8
January 1, 2010, the income tax return preparer has prepared more than 300 qualified 9
returns in the prior taxable year; 10
(2) for a taxable year beginning after December 31, 2009, but before 11
January 1, 2011, the income tax return preparer has prepared more than 200 qualified 12
returns in the prior taxable year; and 13
(3) for any taxable year beginning after December 31, 2010, the income tax 14
return preparer has prepared more than 100 qualified tax returns in the prior taxable year. 15
(c) Subsection (b) of this section does not apply to a qualified return if: 16
(1) the taxpayer has indicated on the qualified return that the taxpayer 17
does not want the return filed by electronic means; or 18
(2) the income tax return preparer preparing the qualified return has 19
requested and received a waiver from the Comptroller. 20
(d) On written request for a waiver by an income tax return preparer who is 21
subject to subsection (b) of this section, the Comptroller may grant the income tax return 22
preparer a waiver of the requirements of this section if the income tax return preparer is 23
able to establish to the satisfaction of the Comptroller either reasonable cause for not filing 24
the return by electronic means or that there is no feasible means of filing the return by 25
electronic means without undue hardship. 26
(E) IF THE COMPTROLLER PROHIBITS AN INCOME TAX RETURN PR EPARER 27
FROM SUBMITTING INCO ME TAX RETURNS ELECT RONICALLY, THE COMPTROLLER 28
SHALL NOTIFY THE STATE BOARD OF INDIVIDUAL TAX PREPARERS ESTABLISHED 29
UNDER TITLE 21 OF THE BUSINESS OCCUPATIONS AND PROFESSIONS ARTICLE 30
WITHIN 5 BUSINESS DAYS AFT ER TAKING THAT ACTION. 31
13–1004. 32
(a) An income tax return preparer who willfully prepares, assists in preparing, or 33
causes the preparation of a false income tax return or claim for refund with fraudulent 34 6 HOUSE BILL 452
intent or the intent to evade income tax is guilty of a misdemeanor and, on conviction, is 1
subject to a fine not exceeding $10,000 or imprisonment not exceeding 5 years or both. 2
(b) An income tax return preparer who willfully attempts to evade any tax 3
imposed under this article or the payment thereof is guilty of a misdemeanor and, on 4
conviction, is subject to a fine not exceeding $10,000 or imprisonment not exceeding 5 years 5
or both. 6
(C) (1) AN INCOME TAX RETURN PREPARER MAY NOT WILLFULLY 7
PREPARE, ASSIST IN PREPARING , OR CAUSE THE PREPARA TION OF AN INCOME TA X 8
RETURN OR CLAIM FOR REFUND WITHOUT BEING PROPERLY LICEN SED OR 9
REGISTERED TO PROVID E INCOME TAX PREPARA TION SERVICES IN THE STATE. 10
(2) A PERSON WHO VIOLATES PARAGRAPH (1) OF THIS SUBSECTION 11
IS GUILTY OF A MISDE MEANOR AND ON CONVIC TION IS SUBJECT TO A FINE NOT 12
EXCEEDING $5,000 FOR EACH VIOLATION . 13
(3) EACH INCOME TAX RETUR N OR CLAIM FOR REFUN D THAT AN 14
INCOME TAX PREPARER PREPARES, ASSISTS IN PREPARING , OR CAUSES THE 15
PREPARATION OF IN VIOLATION OF PARAGRAPH (1) OF THIS SUBSECTION IS A 16
SEPARATE VIOLATION . 17
(4) EACH FINE IMPOSED UND ER THIS SUBSECTION SHALL BE PAID 18
INTO THE TAX CLINICS FOR LOW–INCOME MARYLANDERS FUND ESTABLISHED 19
UNDER § 1–207 OF THIS ARTICLE. 20
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 21
October 1, 2024. 22