Governor Malloy signs Public Act No. 17-147, An Act Concerning State Taxation and Collection, Tax Gap Compliance, Tax Preparers and Facilitators, Changes to the Tax and Related Statutes, a Mental Health Community Investment Account and Municipal Bonds.

Governor Malloy signs Public Act No. 17-147, An Act Concerning State Taxation and Collection, Tax Gap Compliance, Tax Preparers and Facilitators, Changes to the Tax and Related Statutes, a Mental Health Community Investment Account and Municipal Bonds.

Governor Malloy has signed a new law, Public Act 17-147, portions of which make numerous changes concerning the Department of Revenue Services' (DRS) tax enforcement mechanisms and powers.

The new law itself can be read here.

The Office of Legislative Research’s summary of Substitute House Bill 7312, portions of which became the elements of Public Act 17-147 that deal with the Department of Revenue Services as referenced above, can be read here.

Some background on the development of PA 17-147:

SB 1047 – Tax Preparer Penalties

SB 1047 would have transferred certain penalties normally imposed upon the taxpayer to the tax preparer/advisor.

When the Department of Revenue Services (DRS) put forth their proposed legislation this year, SB 1047 – An Act Concerning Tax Preparers and
Facilitators and the Department of Revenue Services’ Changes to the Tax and Related Statutes, there was one section contained in the lengthy bill that was of significant concern to the CTCPA. It concerned us because, in part, it would have transferred certain penalties normally imposed upon the taxpayer to the tax preparer/advisor.

We scheduled a meeting with DRS Commissioner Kevin Sullivan, staff from the Connecticut Bar Association (CBA), and members of both the Society and the CBA to express our concerns. In response to our concerns, Commissioner Sullivan requested that the penalty provision be removed from the legislation and agreed to work with the CTCPA and other stakeholders outside of the legislature this summer to try to address the DRS’s concerns. The provision was ultimately removed.

SB 1047 died, but sections were merged into HB 7312.

SB 1047 – Tax Preparer Registration

As is happening in several states, Connecticut’s DRS decided to pursue regulation of any tax preparer who is not currently regulated or an employee or assistant to a regulated tax preparer. SB 1047 contained a registration mandate as well as outlining several behaviors which are deemed prohibited conduct.

CTCPA supported these sections of the measure, which were merged into HB 7312.