Legislative / Regulatory

CPAs, your life, liberty and happiness are once again safe: The legislative session is over!

Dsc07143More than 2,000 bills have poured in since the 425th session of the Maryland General Assembly started on Jan. 9, 2008. Most of these bills have come in under the filing deadlines last week and are now being published.

Several of the most important bills that we have identified as key to CPAs are now in the legislature. Here is a rundown of what we are working on for you:

1. Mobility for CPAs (Temporary Practice Privileges): HB 1296 CPAs -- Licensed Out-of-State CPAs -- Practice Privilege

We support HB 1296.

Dsc05653Did you know that more than 30 states require you to have a CPA license from their state just to file tax returns? This is part of a nationwide movement to enact "uniform" mobility around the U.S. Our bill is based on the national model bill, titled the Uniform Accountancy Act, and is a joint effort between the regulators (NASBA) and the profession (the AICPA and state CPA societies). Del. Brian Feldman (15th District, Montgomery County, third from left in photo) took on the sponsorship of our bill and has been working hard with us to draft it and get it introduced.

Contact these committees: Senate Education, Health and Environmental Affairs Committee; House Economic Matters Commttee

2. Tax Preparer Bill: SB 817 -- Maryland Individual Tax Preparers Act and HB 1447 -- same version.

We support SB 817 / HB 1447, with changes as follows:

  1. Expand registration and minimum requirements to all tax preparers.
  2. The definition (21-101 (F)) of "provide individual tax preparation services" could include staff of CPAs and CPA firms. The definition should be modified or the exemption (21-102 (B)(1)) for CPAs should be broadened to include any staff under their supervision.
  3. The competency exam is left to the discretion of the new board (21-205 (B)(2)). This should be specified as Part 1 (Individual Income Taxes) of the Special Enrollment Examination administered by the IRS. This is a national standard created by an independent regulatory authority.
  4. Additional funding is necessary for a public awareness campaign or this registration effort may not achieve the intended protection of the public. Communication to Maryland's taxpayers about this new requirement will ensure they are protected when choosing a tax preparer.

We were successful in getting major changes to this bill based on the town hall feedback you gave us:

  1. They are registered individual tax preparers with the Comptroller and not allowed to use "certified" or "licensed" in their title.
  2. CPAs are exempt from registering and CPE and other requirements.
  3. The MACPA will have a seat on the new board.
  4. Mandatory disclosure (21-403 (B)(IV))  that the individual is not a CPA, enrolled agent or tax attorney.

Contact these committees: Senate Education, Health and Environmental Affairs Committee; House Economic Matters Commttee

3. Taxes -- Corporate Reporting Requirements Amendment: SB 444 Corporate Income Tax Reporting and HB 664 same version.

We support SB 444 / HB 664.

This is the much-needed amendment to the bill that passed quickly in the final hours of last fall's special session. The problem is that these reporting requirements are extremely broad and onerous and come with up to five years in jail! This is also retroactive to tax years beginning after Dec. 31, 2005.   

See the MACPA's article by Bev Richard, our State Tax Committee chair, about these new corporate reporting requirements.

The Comptroller  is still working on guidance for this law (and hopefully we will be succesful in easing it). In the meantime, the Comptroller has advised us to have you add a statement to any corporate tax returns that says you acknowledge the reporting requirements set forth in Maryland Senate Bill 2 and intend to comply with those reporting requirements in a timely manner upon the issuance of guidance from the Comptroller's office.

The Maryland Chamber of Commerce's blog has a great recap of these bills here.

Contact these committees: Senate Budget and Tax CommitteeHouse Ways and Means Committee

Stay tuned as we continue to work on the issues that affect you in Annapolis!

MACPA's legislative resources: