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H7613AAdministration & Compliance

Taxation - Tax Preparers Act of 2013

This bill bans "ghost preparers" who charge for preparing taxes without signing the return, and establishes penalties for violations.

Introduced66 Yea3 Nay6 Not voting
Population
Affected
25
Email Legislator
Introduced Feb 11, 2026Committee House Corporations

Plain-English Summary

This bill updates the "Tax Preparers Act" by formally defining a "ghost preparer" as someone who prepares taxes for money but hides their identity by not signing the return or providing a required Preparer Tax Identification Number (PTIN). It prohibits tax preparers from acting as ghost preparers or helping others do so. The bill also establishes financial penalties and allows the tax administrator to suspend or revoke the privileges of tax preparers who commit fraud, willfully mislead taxpayers, or violate these rules.

For younger readers

This bill creates rules for people whose job is to fill out tax forms for others. It bans being a "ghost preparer," which is someone who gets paid to do your taxes but doesn't sign their name or use their special ID number on the forms. If a tax helper cheats, lies, or breaks these rules, they can be charged money as a penalty. The state can also take away their permission to help people with taxes.

Who & Where It Applies

Impacted groups
Tax preparersTaxpayersAccounting firmsDivision of Taxation personnelUnlicensed or informal tax preparers
Impacted communities
All

Constitutional & Fiscal Check

None Likely. The bill regulates commercial activity and professional licensing, which falls within the state's police powers. Due process is maintained by explicitly allowing preparers to request a hearing and petition the district court if their privileges are suspended or revoked.

Estimated cost
None
Estimated revenue
Amount unknown (Fines range from $500 to $10,000 per violation depending on the infraction)

Bill Analysis

Both viewpoints
For Progressives
  • Protects low-income and vulnerable taxpayers from fraudulent or predatory "ghost preparers" who might exploit them and disappear without accountability.
  • Strengthens accountability and oversight of the tax preparation industry, ensuring professionals adhere to ethical standards and state laws.
  • Ensures accurate reporting for social safety net programs like the earned-income credit and property tax relief credit, preventing abuse by unscrupulous preparers.
  • Focuses heavily on punitive measures like fines and revocations rather than providing resources or education to help small, informal preparers comply with regulations.
  • Increased regulation and fear of penalties could reduce the number of affordable tax preparers available in low-income communities.
  • Publishing a list of suspended or revoked preparers could permanently damage the livelihoods of individuals who may have made unintentional errors.
For Conservatives
  • Protects state revenue by cracking down on fraudulent tax preparers who attempt to evade or reduce tax obligations illegally.
  • Promotes the rule of law by strictly penalizing individuals who commit fraud or deliberately circumvent tax laws.
  • Ensures a fair playing field for legitimate, law-abiding tax preparation businesses by penalizing unregulated "ghost preparers."
  • Imposes additional government regulations and strict oversight on private businesses and independent tax preparers.
  • Grants broad authority to the tax administrator to impose heavy fines, suspend privileges, and publicly shame individuals, which could be seen as government overreach.
  • Creates severe financial burdens on small business owners with fines up to $10,000 for compliance failures or administrative errors.

Votes

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Full Bill Text

2 versions
Changes to existing Rhode Island law · 32 additions · 5 deletions

It is enacted by the General Assembly as follows:

SECTION 1. The title of Chapter 44-68 of the General Laws entitled "Tax Preparers Act of 2013" is hereby amended to read as follows:

SECTION 2. Sections 44-68-2, 44-68-3 and 44-68-4 of the General Laws in Chapter 44- 68 entitled "Tax Preparers Act of 2013" are hereby amended to read as follows: 44-68-2. Definitions. As used in this chapter, the following words shall, unless the context clearly requires otherwise, have the following meanings:

(a) “Ghost preparer” means a tax return preparer who does not self-identify on returns they prepare or does not comply with the PTIN requirements in 26 U.S.C. § 6109 and Treasury Regulation 26 C.F.R. § 1.6109-2, and is compensated for or otherwise benefits from the preparation of returns. (a)(b) “Tax return preparer” means an individual who prepares a substantial portion of any return for compensation. Tax return preparers include ghost preparers and individuals required to register with the Internal Revenue Service as a tax return preparer and who have a Preparer Tax Identification Number (PTIN). For the purpose of this chapter the following individuals shall not be considered tax return preparers:

(1) Volunteer tax return preparers; or

(2) Employees of a tax return preparer and employees of a commercial tax return preparation business who provide only clerical, administration or other similar services. (b)(c) “Preparer Tax Identification Number” or “PTIN” means the number issued by the Internal Revenue Service (IRS) to paid preparers to use that must be included on all the returns they prepare. (c)(d) “Return” shall mean any tax report, return, claim for refund or attachment to any report, return and/or claim for return refund filed with the tax administrator pursuant to the tax laws of this state. 44-68-3. Duties and responsibilities.

(a) A tax return preparer who prepares any return that is submitted to the tax administrator must comply with all state laws and all applicable regulations promulgated by the tax administrator.

(b) A tax return preparer must sign and include his/her preparer tax identification number on all returns prepared and filed with the division of taxation.

(c) A tax return preparer shall not be a ghost preparer or engage in any activity with the intent to facilitate the use of a ghost preparer. 44-68-4. Civil penalties.

(a) Failure to be diligent in determining eligibility for or amount of earned-income credit. Upon a determination by the tax administrator that a tax return preparer prepared a return(s) and failed to comply with due diligence requirements imposed by regulations issued by the tax administrator with respect to determining eligibility for, or the amount of, the credit allowable by § 44-30-2.6(c)(2)(N), the tax return preparer shall pay a penalty of five hundred dollars ($500) for each such return and/or claim.

(b) Failure to be diligent in determining eligibility for property tax relief credit. Upon a determination by the tax administrator that a tax return preparer prepared a return(s) and failed to comply with due diligence requirements imposed by regulations issued by the tax administrator with respect to determining eligibility for, or the amount of, the property tax relief credit allowable by § 44-33-1 et seq., the tax return preparer shall pay a penalty of five hundred dollars ($500) for each such return.

(c) Tax return preparer civil penalties.

(1) Upon a determination by the tax administrator that a tax return preparer willfully prepared, assisted in preparing, or caused the preparation of a return(s) filed with the division of taxation with intent to wrongfully obtain a property tax relief credit or with the intent to evade or reduce a tax obligation, the tax return preparer shall be liable for a penalty of one thousand dollars ($1,000), or five hundred ($500) for each return so filed during any calendar year, whichever is greater.

(2) Upon a determination by the tax administrator that a tax return preparer willfully misled or committed fraud against a taxpayer, or purposefully circumvented tax laws administered by the tax administrator, or violated any provision of § 44-68-3, the tax return preparer shall be liable for a penalty of not more than one thousand dollars ($1,000) for each return so filed during any calendar year.

(d) The tax administrator may suspend or revoke the privilege of a tax return preparer to prepare and/or file returns with the division of taxation upon a determination that the tax return preparer has failed to comply with or violated any provision of this section, any regulations issued by the tax administrator, or with any provision of any other laws relative to the preparation of tax returns. Any tax return preparer receiving a notice of intent to suspend or revoke the privilege to file tax returns with the division of taxation may request a hearing on the notice of intent to suspend or revoke; provided that said request for a hearing must be made within thirty (30) days of such notice to suspend or revoke. If, after hearing, the tax return preparer is aggrieved by a decision of the tax administrator (or his or her designated hearing officer), the tax return preparer may, within thirty (30) days after notice of the decision is sent to the tax return preparer by certified or registered mail, directed to their last known address, petition the sixth division of the district court pursuant to chapter 8 of title 8, setting forth the reasons why the decision is alleged to be erroneous and praying for relief therefrom. The tax administrator may, on a periodic basis, prepare and publish a list of tax return preparers whose privileges as a tax return preparer have been suspended or revoked.

(e) Upon a determination by the tax administrator that a tax return preparer has committed a violation of this section subsequent to a suspension or revocation of that tax return preparer’s privilege to prepare and/or file returns with the division of taxation, the tax return preparer shall be liable for a penalty of not more than five thousand dollars ($5,000) if suspended, or ten thousand dollars ($10,000) if revoked, per violation.

SECTION 3. This act shall take effect upon passage.