MISSISSIPPI LEGISLATURE
2017 Regular Session
To: Ways and Means
By: Representative Formby
AN ACT TO AMEND SECTION 27-7-87, MISSISSIPPI CODE OF 1972, TO REQUIRE THAT INCOME TAX RETURN PREPARERS MUST REGISTER WITH THE DEPARTMENT OF REVENUE; TO PROVIDE THAT CERTAIN PREPARERS MUST FURNISH THE DEPARTMENT WITH PROOF OF ERRORS AND OMISSIONS INSURANCE COVERAGE OR SURETY; TO PROVIDE THAT THE DEPARTMENT MAY INVESTIGATE THE ACTIONS OF ANY INCOME TAX RETURN PREPARER DOING BUSINESS IN THIS STATE; TO PROVIDE THAT THE DEPARTMENT MAY BAR OR SUSPEND AN INCOME TAX RETURN PREPARER FROM FILING RETURNS WITH THE DEPARTMENT FOR GOOD CAUSE; TO PROVIDE A CIVIL PENALTY FOR PERSONS FAILING TO USE THEIR IRS PREPARER TAX IDENTIFICATION NUMBER; 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) A person may not operate as an income tax return preparer in the State of Mississippi unless he or she is registered with the Department of Revenue. In addition, any income tax return preparers who are not certified by the Mississippi State Bar Association or the Mississippi State Board of Public Accountancy shall furnish proof of errors and omissions insurance coverage or surety as deemed sufficient by the department.
(b) The department may investigate the actions of any income tax return preparer doing business in this state. The department may bar or suspend an income tax return preparer from filing returns with the department for good cause.
(c) In addition to any other penalty provided by law, any individual or person violating this subsection (4) by failing to provide his or her Internal Revenue Service Preparer Tax Identification Number shall pay a civil penalty to the department in the amount of Fifty Dollars ($50.00) per offense, but not to exceed Twenty-five Thousand Dollars ($25,000.00) per calendar year; however, no such penalty shall be imposed if it is shown that the failure is due to reasonable cause and not due to willful neglect, as determined by the department.
(d) The department shall promulgate rules and regulations necessary to implement, administer and enforce this subsection (4).
( * * *5) (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) Submission of returns reflecting a tax liability that is understated by twenty-five percent (25%) or greater.
(ii) Submission of returns containing errors affecting the calculation of tax after being notified of these types of errors by the department.
(iii) Submission of returns claiming a position that is not reasonably sustainable by the department, Board of Tax Appeals or an appropriate appellate court.
(iv) Submission of returns reporting deductions, exemptions or other reductions to income that cannot be documented to support the return.
(c) The penalty provided for in this subsection may be imposed for each return that a preparer has so prepared.
(d) If a paid preparer is assessed a penalty under this subsection and he fails to legibly sign each return and include his federal employer identification number or preparer tax identification number issued by the Internal Revenue Service, the paid preparer shall be liable for a penalty of Five Hundred Dollars ($500.00) in addition to any other penalty authorized by this subsection.
(e) 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.
( * * *6) 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 Department of Revenue 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.
( * * *7) The commissioner shall make
assessments against and effect collection from persons who are subjected to a
penalty under this section in the same manner that is provided for the
assessment and collection of taxes levied by this chapter.
SECTION 2. This act shall take effect and be in force from and after July 1, 2017.