2007 Regular Session
To: Banking and Financial Services
By: Representative Upshaw
AN ACT TO REQUIRE TAX PREPARERS TO MAKE CERTAIN DISCLOSURE TO CLIENTS ABOUT REFUND ANTICIPATION LOANS IF THE PREPARER OFFERS TO MAKE OR FACILITATE A REFUND ANTICIPATION LOAN TO THE CLIENT; TO REQUIRE THAT THE DISCLOSURES MUST BE MADE BEFORE OR AT THE SAME TIME THE PREPARER OFFERS THE REFUND ANTICIPATION LOAN TO THE CLIENT; TO REQUIRE TAX PREPARERS TO PROVIDE THE CLIENT WITH AN ITEMIZED STATEMENT OF THE CHARGES FOR SERVICES, AT LEAST SEPARATELY STATING THE CHARGES FOR RETURN PREPARATION AND FOR PROVIDING OR FACILITATING A REFUND ANTICIPATION LOAN; TO PROHIBIT TAX PREPARERS FROM CHARGING OR ACCEPTING A FEE FOR TAX PREPARATION SERVICES RELATING TO A REFUND ANTICIPATION LOAN THAT IS BASED UPON A PERCENTAGE OF THE AMOUNT OF THE ANTICIPATED REFUND; TO AUTHORIZE THE STATE TAX COMMISSION TO IMPOSE ON A TAX PREPARER AN ADMINISTRATIVE PENALTY FOR EACH VIOLATION OF THIS ACT; TO REQUIRE THE COMMISSION TO REFER COMPLAINTS ABOUT TAX PREPARERS WHO ARE ALLEGED TO HAVE VIOLATED THE PROVISIONS OF THIS ACT TO THE STATE BOARD OF PUBLIC ACCOUNTANCY OR THE MISSISSIPPI BAR, IF THE TAX PREPARER IS UNDER THEIR JURISDICTION; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. (1) For purposes of this section, the following terms have the meanings as provided in this subsection:
(a) "Client" means an individual for whom a tax preparer performs or agrees to perform tax preparation services.
(b) "Refund anticipation loan" means a loan, whether provided by the tax preparer or another entity such as a financial institution, in anticipation of, and whose payment is secured by, a client's federal or state income tax refund or both.
(c) "Tax preparation services" means services provided for a fee or other consideration to a client to:
(i) Assist with preparing or filing federal or state individual income tax returns;
(ii) Assume final responsibility for completed work on an individual income tax return on which preliminary work has been done by another; or
(iii) Offer or facilitate the provision of refund anticipation loans.
(d) "Tax preparer" or "preparer" means a person who provides tax preparation services.
(2) If a tax preparer offers to make or facilitate a refund anticipation loan to the client, the preparer must make the disclosures in this section. The disclosures must be made before or at the same time the preparer offers the refund anticipation loan to the client.
(3) The tax preparer must provide to a client a written notice on a single sheet of paper, separate from any other document or writing, containing:
(a) A legend, centered at the top on the single sheet of paper, in bold, capital letters, and in 28-point type stating "NOTICE";
(b) The following verbatim statements:
(i) "This is a loan. The annual percentage rate (APR), based on the estimated payment period, is (fill in the estimated APR)."
(ii) "Your refund will be used to repay the loan. As a result, the amount of your refund will be reduced by (fill in appropriate dollar amount) for fees, interest, and other charges."
(iii) "You can get your refund in about two weeks if you file your return electronically and have the Internal Revenue Service send your refund to your own bank account." and
(c) If the client is subject to additional interest when a refund is delayed, the following verbatim statement also must be included in the notice: "If you choose to take this loan and your refund is delayed, you may have to pay additional interest."
(4) All required statements must be in capital and small font type fonts, in a minimum of 14-point type, with at least a double space between each line in the statement and four spaces between each statement.
(5) The notice must be signed and dated by the tax preparer and the client.
(6) A tax preparer must provide the client with an itemized statement of the charges for services, at least separately stating the charges for:
(a) return preparation; and
(b) providing or facilitating a refund anticipation loan.
(7) No tax preparer shall charge, offer to accept, or accept a fee for tax preparation services relating to a refund anticipation loan that is based upon a percentage of the amount of the anticipated refund.
(8) The State Tax Commission may impose on a tax preparer an administrative penalty of not more than One Thousand Dollars ($1,000.00) for each violation of this section. The commission may terminate a tax preparer's authority to transmit returns electronically to the state, if the commissioner determines the tax preparer engaged in a pattern and practice of violating this section.
(9) The State Tax Commission shall refer complaints about tax preparers who are alleged to have violated the provisions of this section to:
(a) The State Board of Public Accountancy, if the tax preparer is under its jurisdiction; and
(b) The Mississippi Bar, if the tax preparer is under its jurisdiction.
SECTION 2. This act shall take effect and be in force from and after July 1, 2007.