2007 Regular Session
By: Senator(s) Robertson, Albritton, Burton, Chaney, Chassaniol, Clarke, Jordan, King
AN ACT TO AMEND SECTION 27-7-87, MISSISSIPPI CODE OF 1972, TO INCREASE THE PENALTY FOR GROSSLY NEGLIGENT PREPARATION OF AN INCOME TAX RETURN BY A PREPARER; TO PROVIDE THAT CERTAIN ACTIONS BY A PREPARER SHALL BE CONSIDERED TO BE GROSSLY NEGLIGENT; TO REQUIRE THE CHAIRMAN OF THE STATE TAX COMMISSION TO SEEK TO ENJOIN PREPARERS WHO ARE PENALIZED UNDER THIS SECTION FROM CONTINUING TO PREPARE INCOME TAX RETURNS FOR OTHER PERSONS; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. Section 27-7-87, Mississippi Code of 1972, is amended as follows:
27-7-87. (1) Any person making the returns and reports required by this article, who shall knowingly declare or swear falsely, shall be guilty of perjury, and, upon conviction, shall be punished by imprisonment in the State Penitentiary for a term not exceeding ten (10) years.
(2) If any individual, corporation, partnership or fiduciary, or any officer, employee, or representative thereof, or member of a partnership, required to pay any tax, make any return, or supply any information or exhibit any books, or records, when requested to do so by the commissioner, or any agent designated by the commissioner, whether with reference to their own returns or not, willfully refuses to do so, the same shall be guilty of a misdemeanor and, upon conviction, shall be fined not less than One Hundred Dollars ($100.00), nor more than Five Hundred Dollars ($500.00), or be imprisoned not more than six (6) months, or both. Failure by any of the previously mentioned entities to supply information pursuant to a written request within a reasonable amount of time may subject the entity to a civil penalty of Five Hundred Dollars ($500.00) per each written request.
(3) Any person violating the provisions of Section 27-7-83 shall be guilty of a misdemeanor and, upon conviction, shall be punished by a fine of not exceeding One Thousand Dollars ($1,000.00), or by imprisonment not exceeding one (1) year, or both, at the discretion of the court, and if the offender be an officer or employee of the state, he shall be dismissed from office and be incapable of holding any public office in this state for a period of five (5) years thereafter.
(4) (a) Any preparer who is grossly negligent in the preparation of a tax return shall be liable for a penalty of Five Hundred Dollars ($500.00) for each return so prepared. Every paid preparer must legibly sign each return prepared and must also furnish his federal employer identification number or preparer tax identification number issued by the Internal Revenue Service.
(b) For purposes of this subsection, the term "grossly negligent" shall include, but not be limited to:
(i) Frequent submission of returns reflecting a tax liability that is understated by twenty-five percent (25%) or greater.
(ii) Continued submission of returns containing errors affecting the calculation of tax after being notified of these types of errors by the commission.
(iii) Submission of returns claiming a position that is not reasonably sustainable by the commission or an appropriate appellate court.
(iv) Continued submission of returns reporting deductions, exemptions or other reductions to income that cannot be documented to support the return.
(c) If any person is found to be engaging in the activity of preparing tax returns for others after being penalized as provided for in this subsection, it shall be the duty of the commissioner to proceed to seek an injunction to prevent the person from continuing the preparation of returns.
(5) Any individual, corporation or other entity who fails to file a return, or fails to file a complete return, within the prescribed time including extensions and after a written request therefor from the Tax Commission may be subject to a penalty. The penalty is Twenty-five Dollars ($25.00) per incomplete or omitted attachment or schedule. The maximum penalty per return is Five Hundred Dollars ($500.00). The required schedules or attachments are to be specified by the commissioner in the Income Tax Regulations or the instructions with the tax forms.
SECTION 2. This act shall take effect and be in force from and after July 1, 2007.