TRENTON – A measure sponsored by Senate Majority Leader Steve Sweeney, which would regulate the way tax preparers handle their clients’ tax returns has been signed into law.
“This legislation is about making sure that people who are entrusted with the task of preparing other people’s taxes handle the files property, and do not take advantage of those they are being paid to help,” said Senator Sweeney, D-Gloucester, Cumberland and Salem. “The new law also directs tax preparers to explain the forms to their clients and make sure that they understand all forms and fees.”
Under Senator Sweeney’s bill, S-2159, a “tax preparer” is defined as any individual or entity that provides tax preparation services. The law also prohibits tax preparers from having clients sign documents before they are completed, requiring clients to enter into refund anticipation loans, and charging fees based on the amount of an anticipated refund.
“There has been a problem with tax preparers convincing clients to get refund anticipation loans, which are basically short-term cash advances which clients take, with the promise of repaying once they receive their refund. The issue with these loans is that the interest rates are often very high, and once the tax rebates are received, they must be turned right back over to the tax preparation company,” said Senator Sweeney.
“This law will help to educate consumers, so that they are able to make the best decisions possible for their money,” said Senator Sweeney.