Handcuffs on federal income tax form 1040 and other forms. Concept of tax fraud and income tax scam. Image with a grunge texture effect.

The MACPA’s legislative season kicked into high gear on Jan. 26 when a record 250 members and state legislators turned out for the association’s annual CPA Day in Annapolis.

The real work, though, begins on Feb. 14.

Jeff Lawson, CPA, a partner with Stoy Malone and Company and chair of the MACPA’s State Tax Committee, will testify that day before the House Judiciary Committee during a hearing on House Bill 424, the “Taxpayer Protection Act,” a bill introduced by the Hogan administration and supported by Comptroller Peter Franchot that would help the Comptroller’s Office prevent tax fraud, safeguard taxpayer information, and hold fraudulent tax filers and preparers accountable. A hearing on the cross-filed Senate Bill 304 will be held on Feb. 15 before the Senate Budget and Taxation Committee. KatzAbosch President and CEO Mark Cissell, a member of the MACPA’s Legislative Executive Committee, will testify at that meeting.

Here’s what the Comptroller’s Office has to say about the proposed bill:

“The legislation will allow the Comptroller’s Office and the state of Maryland to keep pace with the rapidly increasing fraud schemes and growing threats to sensitive data. The bill grants additional statutory responsibilities to the Field Enforcement Division of the Comptroller’s Office to investigate potential incidents of tax fraud and allow the agency to seek injunctions against tax preparers suspected of fraudulent and criminal practices in an effort to protect consumers from financial harm.

“In addition, the legislation extends the statute of limitations for tax crimes to six years from the current three years, matching the statute of limitations under the Internal Revenue Code for federal tax crimes. This extension will allow sufficient time to properly investigate fraud cases, which often involve highly sophisticated schemes.

“The bill also seeks to hold unscrupulous tax preparers accountable by placing greater legal responsibility on predatory tax preparers who use unknowing taxpayers to commit fraud. The legislation adds a penalty for fraudulent tax return preparers and provides legal authority to issue injunctions against fraudulent tax preparers in order to protect consumers during ongoing investigations.

“Furthermore, the Taxpayer Protection Act prohibits tax professionals from employing an individual to provide tax preparation services who is not registered with the Board of Tax Preparers through the Department of Labor, Licensing, and Regulation.

“Finally, the bill authorizes the Office of the Comptroller to disclose certain tax information to the State Board of Individual Tax Preparers, the U.S. Internal Revenue Service, and the U.S. Department of Justice. This provision allows the Comptroller’s Office to work with state and federal government entities to take swift legal action against tax return preparers who have been found to have been engaging in fraudulent activity.”

MACPA members are encouraged to continue their legislative advocacy efforts by writing letters to their legislators in support of the Taxpayer Protection Act. Those who do should CC Mary Beth Halpern, the MACPA’s director of advocacy and technical services, at marybeth@macpa.org. Enter your address here to find your elected officials.

Read more about the Taxpayer Protection Act here.

Learn more at our spring town hall meetings
MACPA Executive Director Tom Hood will provide updates on the Taxpayer Protection Act and all other pieces of legislation that impact Maryland CPAs as part of his spring series of professional issues updates throughout the state. These town hall-style meetings offer members invaluable insight into our always-changing profession.

Each meeting will be free for MACPA members and worth four hours of CPE. All spring meetings will also be available via simulcast.

Check out the complete schedule here.

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