Louisiana Enacts Provisions for Paid Tax Preparers

Effective July 1, 2018, Louisiana has enacted provisions pertaining to the requirements of paid tax preparers. Any return, report, claim for refund, or other claim prepared by a paid preparer must be signed by the preparer and must include the preparer tax identification number, federal employer identification number, or Louisiana Department of Revenue (DOR) account number of the preparer. A penalty of $50 for each failure to sign and for each failure to provide one of the required identification numbers will apply unless it can be shown that the failure was due to reasonable cause. The maximum penalty cannot exceed $25,000 per calendar year.

The requirements apply to any returns, reports and claims as follows:

• For income taxes, all taxable periods ending on or after June 30, 2018, and filed on or after January 1, 2019.
• For corporation franchise tax, all taxable periods ending on or after June 30, 2018, and filed on or after June 30, 2019.
• For taxes other than income and corporation franchise taxes, all taxable periods beginning on or after July 1, 2018.
• For any return, report, claim, or other filing not included above, all filed on or after January 1, 2019

For purposes of the legislation, “paid preparer” means:

• Any person who prepares, for compensation, any return, report, claim for refund, or other claim that is filed with the secretary of the DOR.
• Any person who owns or operates a business, the primary activity of which is the preparation for compensation of any return, report, claim for refund, or other claim that is filed with the secretary of the DOR, and employs one or more persons in such business.
• Any person who prepares a substantial portion of a return, report, claim for refund, or other claim that is filed with the secretary of the DOR and does not sign as the preparer, but rather has the taxpayer sign as if the return, report, claim for refund, or other claim were self-prepared.

“Paid preparer” does not include:

• Any employee who prepares a return, report, claim for refund, or other claim for the employer by whom he is regularly and continuously employed.
• An attorney or other tax advisor whose association with a return, report, claim for refund, or other claim is limited to that of rendering advice to a taxpayer or preparer and was not otherwise involved in preparing the return, report, claim for refund, or other claim for which advice was rendered.

(Act 525 (S.B. 237), Laws 2018, effective July 1, 2018)