Despite a law passed in 2008 requiring tax preparers to register with the state, consumer advocates believe an unknown number have failed to register while more than 1,000 may have let their registrations lapse.
A bill to allow the Maryland Board of Individual Tax Preparers to impose criminal sanctions on those who don't register is scheduled to be heard Tuesday afternoon in the General Assembly's House of Delegates. The bill would allow the oversight board created in 2008 to charge a tax preparer who fails to register with a misdemeanor punishable with a maximum sentence of six months or a maximum fine of $5,000.
House Bill 871 would close a loophole in the original law, advocates say. There are an estimated 33,000 tax preparers in the state who would need to register, though attorneys and tax preparers regulated by other oversight boards are exempt, according to consumer advocate Robin McKinney, the director of Maryland CASH Campaign and a supporter of the bill.
About 5,700 preparers have registered since the law's inception, but only 4,200 preparers have current registrations, McKinney said. McKinney said it's not clear how many tax preparers aren't registered.
"We don't know the number," she said. "Not the Comptroller's Office, not the IRS, none of them have been able to figure out a way to track that, and it's really frustrating."
Not giving the board the ability to impose criminal penalties in the original law was an oversight, she said.
There is no companion bill in the Senate. In the last two sessions, a similar bill passed the Senate unanimously but stalled in the House. McKinney said advocates wanted to try a new approach this year and attempt to get the bill through the House first.