Chapter 136 Oregon Laws 2001

AN ACT

SB 301

Relating to persons who prepare tax returns; creating new provisions; and amending ORS 673.605, 673.640, 673.690, 673.700, 673.705, 673.725, 673.730 and 673.735.

Be It Enacted by the People of the State of Oregon:

SECTION 1. ORS 673.700 is amended to read:

673.700. The State Board of Tax [Service Examiners] Practitioners may refuse to issue or renew a tax consultant or preparer’s license, or may suspend or revoke a tax consultant or preparer’s license, or may reprimand any person licensed as a tax consultant or tax preparer for:

(1) Violation of ORS 673.615 or 673.705.

(2) Failure to keep the records required by ORS 673.690.

(3) [Gross] Negligence or incompetence in tax consultant or tax preparer practice or when acting in the capacity of a tax preparer or tax consultant in another state, or under an exempt status or in preparation of the personal income tax return for another state or the federal government.

(4)(a) Conduct resulting in a conviction of a felony under the laws of any state or of the United States. However, such conduct may be considered only to the extent permissible under the provisions of ORS 670.280; or

(b) Conviction of any crime, an essential element of which is dishonesty, fraud or deception, under the laws of any state or of the United States.

(5) Conviction of willful failure to pay any tax or estimated tax, file any tax return, keep records or supply information required under the tax laws of any state or of the United States, or conviction of the willful making, rendering, delivery, disclosure, signing or verifying of any false or fraudulent list, return, account, statement or other document, or of supplying any false or fraudulent information, required under the tax laws of any state or of the United States.

(6) Failure to comply with continuing education requirements under ORS 673.655 or under ORS 673.667 unless such requirements have been waived by the board.

(7) Violation of the code of professional conduct prescribed by the board.

(8) Failure to pay any civil penalty incurred under ORS 673.735 within the time determined by the board.

(9) Cancellation, revocation or refusal to renew by any state or federal agency of, or entry of a consent order, stipulated agreement or judgment related to, the person’s authority to practice law, to practice as a certified public accountant or a public accountant or to practice under other regulatory law in any state, or to practice as an enrolled agent, if the grounds for the cancellation, revocation, [or] refusal to renew, consent order, stipulated agreement or judgment were related to income tax preparation or if dishonesty, fraud or deception was involved.

(10) Cancellation, revocation or refusal to renew by any state or federal agency of, or entry of a consent order, stipulated agreement or judgment related to, a business’s authority to conduct operations related to the practice of law, certified public accountancy, public accountancy or other services provided under regulatory law in any state, or to provide enrolled agent services, if the grounds for the cancellation, revocation, refusal to renew, consent order, stipulated agreement or judgment involved the conduct or actions of the licensee or applicant and:

(a) Were related to income tax preparation; or

(b) Involved dishonesty, fraud or deception.

SECTION 2. ORS 673.705 is amended to read:

673.705. It shall be unlawful for any person to:

(1) Obtain or attempt to obtain a license as a tax consultant or a tax preparer by any fraudulent representation.

(2) [Willfully] Make a false oath or affirmation under ORS 673.630 or 673.635.

(3) Represent that the person is licensed as a tax consultant or a tax preparer if the person is not so licensed.

(4) Present or attempt to use the license of another.

(5) Attempt to use a suspended, lapsed or revoked license.

(6) Falsely impersonate a licensee under ORS 673.605 to 673.740.

(7) Engage in dishonesty, fraud or deception relating to the preparation of personal income tax returns.

(8) Violate a position of trust, including a position of trust outside the licensee’s professional practice.

SECTION 3. ORS 673.730 is amended to read:

673.730. The State Board of Tax [Service Examiners] Practitioners shall have the following powers, in addition to the powers otherwise granted by ORS 673.605 to 673.740, and shall have all powers necessary or proper to carry the granted powers into effect:

(1) To determine qualifications of applicants for licensing as a tax consultant or a tax preparer in this state; to cause examinations to be prepared, conducted and graded; and to issue licenses to qualified applicants upon their compliance with ORS 673.605 to 673.740 and the rules of the board.

(2)(a) To restore the license of any tax consultant or preparer whose license has been suspended or revoked.

(b) The power of the board to suspend any license under ORS 673.700 includes the power to restore:

(A) At a time certain; or

(B) When the person subject to suspension fulfills conditions for reissuance set by the board.

(c) The power of the board to restore a license under paragraph (a) of this subsection specifically includes the power to restore a license suspended or revoked for the reason that the person has been convicted of a crime. In making a determination to restore a license, the board shall consider the relationship of the facts which supported the conviction to the code of professional conduct and all intervening circumstances in determining the fitness of the person to receive or hold a tax consultant’s or tax preparer’s license.

(3) To prescribe fees, subject to ORS 673.685, and to collect fees.

(4) To investigate alleged violations of ORS 673.605 to 673.740, or any rule or order adopted thereunder. The board may keep information gathered pursuant to an investigation by the board confidential until there is a final order or determination by the board, unless disclosure is considered necessary by the board for the investigation or prosecution of an alleged violation of ORS 673.605 to 673.740, or any rule or order adopted thereunder. The board may keep personal financial information gathered pursuant to an investigation by the board confidential after a final order or determination by the board, unless disclosure is considered necessary by the board for the investigation or prosecution of an alleged violation of ORS 673.605 to 673.740, or any rule or order adopted thereunder. For purposes of this subsection, personal financial information includes but is not limited to tax returns.

(5) To enforce the provisions of ORS 673.605 to 673.740 and to exercise general supervision over tax consultant and tax preparer practice.

(6) To issue an order directed to a person to cease and desist from any violation or threatened violation of ORS 673.615, 673.643 or 673.705, or any rule or order adopted thereunder, if the board has reason to believe that a person has been engaged, is engaging or is about to engage in any violation of ORS 673.615, 673.643 or 673.705, or any rule or order adopted thereunder.

(7) To assess civil penalties within a cease and desist order issued under subsection (6) of this section if the board has reason to believe that a person has been engaged or is engaging in any violation of ORS 673.615, 673.643 or 673.705, or any rule or order adopted thereunder. The civil penalty may not exceed $5,000 per violation.

[(6)] (8) To formulate a code of professional conduct for tax consultants and tax preparers.

(9) To assess against the licensee or any other person found guilty of violating any provision of ORS 673.605 to 673.740, or any rule or order adopted thereunder, in addition to any other sanctions, the costs associated with the disciplinary or other action taken by the board.

(10) To order that any person who has engaged in or is engaging in any violation of ORS 673.605 to 673.740, or any rule or order adopted thereunder, shall offer to rescind and pay restitution to anyone harmed by the violation who seeks rescission.

SECTION 4. ORS 673.735 is amended to read:

673.735. (1) Any person who violates any provision of ORS 673.605 to 673.740, [or] any rule adopted thereunder or any order of the State Board of Tax Practitioners shall incur, in addition to any other penalty provided by law, a civil penalty in an amount of not more than [$1,000] $5,000 for each violation. The amount of penalty shall be determined by the [State] board [of Tax Service Examiners] after taking into consideration the gravity of the violation, the previous record of the violator in complying, or in failing to comply, with the provisions of ORS 673.605 to 673.740 or the rules adopted thereunder, and other considerations as the board considers appropriate.

(2) Civil penalties under this section shall be imposed as provided in ORS 183.090.

(3) All penalties recovered under this section shall be paid into the General Fund to be credited to the board for use in carrying out the provisions of this section.

SECTION 5. (1) Except as provided in ORS 183.090, upon entry of a cease and desist order under ORS 673.605 to 673.740, the State Board of Tax Practitioners shall promptly give appropriate notice of the cease and desist order as provided in this section. The notice shall state that a hearing will be held on the cease and desist order if written demand for a hearing is filed with the board within 20 days after the date of service of the cease and desist order.

(2) If timely demand for a hearing is filed under subsection (1) of this section, the board shall hold a contested case hearing on the cease and desist order as provided by ORS 183.310 to 183.550. In the event of a contested case hearing, the civil penalties assessed in the cease and desist order are suspended until issuance of a final order, but the remaining provisions of the cease and desist order shall remain in full force and effect until issuance of the final order. A person is not entitled to judicial review of a cease and desist order unless the person has made a timely demand for a hearing.

(3) After the hearing, the board shall enter a final order vacating, modifying or affirming the cease and desist order.

(4) A person aggrieved by a cease and desist order of the board that was the subject of a timely application for hearing shall be entitled to judicial review of the cease and desist order under ORS 183.310 to 183.550.

(5) A decree of a reviewing court under ORS 183.310 to 183.550 does not bar the board from thereafter vacating or modifying a cease and desist order involved in the proceeding for review, or entering any new order, for a proper cause that was not decided by the reviewing court.

(6) The board may file an injunction against a person for failure to comply with a cease and desist order.

SECTION 6. ORS 673.640 is amended to read:

673.640. (1) The State Board of Tax [Service Examiners] Practitioners shall license as a tax consultant or a tax preparer each applicant who:

(a) Demonstrates to the satisfaction of the board fitness for a license; [and]

(b) Pays to the board an initial license fee as provided under ORS 673.685; and

(c) Has no disciplinary actions pending before the board.

(2) The board shall issue evidence of licensing to each person licensed.

SECTION 7. ORS 673.690 is amended to read:

673.690. (1) Except as provided in this section, every person licensed as a tax consultant shall keep records of all personal income tax returns prepared by the person, or in the preparation of which advice or assistance of the person has been given. The records of the returns shall be kept for a period of not less than four years after the date of the preparation, advice or assistance.

(2) If a tax consultant is employed by another tax consultant, the records shall be kept by the employing tax consultant.

(3) If a tax consultant who has been designated as responsible for the tax return preparation activities and decisions of a partnership, corporation or other legal entity ceases to be connected with the partnership, corporation or other legal entity, the records shall be retained by the partnership, corporation or other legal entity.

SECTION 8. ORS 673.725 is amended to read:

673.725. (1) There is created a State Board of Tax [Service Examiners] Practitioners. The board shall consist of seven members who shall be appointed by the Governor.

(2) The term of office for each member shall be three years and no member shall be eligible for appointment to more than three terms of office, but a member serves at the pleasure of the Governor. Before the expiration of the term of a member, the Governor shall appoint a successor or reappoint the incumbent member if the incumbent member is eligible for reappointment. The Governor shall fill vacancies on the board as they may occur and a member appointed to fill a vacancy shall serve the unexpired term of the predecessor.

(3)(a) Of the members of the board six shall be licensed as tax consultants under ORS 673.605 to 673.740. Each of the six shall have been engaged in the preparation of personal income tax returns for another and for a valuable consideration for no less than five years.

(b) One member of the board shall be a member of the general public.

(4) All appointments of members of the board by the Governor are subject to confirmation by the Senate pursuant to section 4, Article III, Oregon Constitution.

SECTION 9. ORS 673.605 is amended to read:

673.605. As used in ORS 673.605 to 673.740 unless the context requires otherwise:

(1) “Board” means the State Board of Tax [Service Examiners] Practitioners created by ORS 673.725.

(2) “Tax consultant” means a person who is licensed under ORS 673.605 to 673.740 to prepare or advise or assist in the preparation of personal income tax returns for another and for valuable consideration.

(3) “Tax preparer” means any person who is licensed under ORS 673.605 to 673.740 as a tax preparer.

SECTION 10. (1) The amendments to ORS 673.725 by section 8 of this 2001 Act are intended to change the name of the State Board of Tax Service Examiners to the State Board of Tax Practitioners.

(2) For the purpose of harmonizing and clarifying statute sections published in Oregon Revised Statutes, the Legislative Counsel may substitute for words designating the State Board of Tax Service Examiners, wherever they occur in Oregon Revised Statutes, other words designating the State Board of Tax Practitioners.

Approved by the Governor May 16, 2001

Filed in the office of Secretary of State May 16, 2001

Effective date January 1, 2002

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