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 tax-
payer 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, Com-
missioner 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, which was adopted by
the House and Senate and awaits action by the Governor.
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 em-
ployee or assistant to a regulated tax preparer. SB 1047 contained a regis-
tration mandate as well as outlining several behaviors which are deemed
CTCPA supported these sections of the measure, which were merged into
HB 7312 awaits action by the Governor.
Legislative Session Wrap-Up
SB 5, Estate Tax: Increases the Con-
necticut estate tax to match the fed-
eral state tax exemption.
SB 62, Gift Tax: Repeals the gift tax
beginning January 1, 2010.
SB 787, Governor's Revenue Pack-
age: Finance Committee tax package
for fiscal years 2018-2019, which in-
cludes across-the-board fee increas-
es and a number of tax provisions,
including exempting Social Security
benefits from personal income tax,
reducing healthcare center tax rates
and insurance premiums, a seven-
year phaseout of the hospital tax (set
to begin in fiscal year 2021), increas-
ing the estate and gift tax threshold
over three years, eliminating the gift
tax in 2020, allowing taxpayers with
stranded research and development
credits who make certain investments
or capital improvements to use those
credits, creating a tax credit for quali-
fying college graduates, and lowering
(starting July 1, 2019) the maximum
amount of General Fund-supported
debt the legislature can authorize.
Died, but components of substitute
Senate Bill 787 are expected to be
raised and possibly merged into the
SB 965, Income Tax Reductions:
Requires Connecticut Innovations to
study and recommend certain busi-
ness sectors for inclusion in a pro-
gram providing an income tax deduc-
tion for venture capital investment in
SB 1047, Tax Preparer Registration/
Penalties: Mandates registration of
certain tax preparers, but excludes
CPAs and tax preparers working un-
der CPAs. Also includes a penalty
provision for certain prohibited acts.
Died, but sections were merged into
HB 7312, which was adopted by the
House and Senate and awaits action
by the Governor.
Another measure that required our attention was proposal concerning the
legislature's desire to define what constitutes a "forensic audit."
SB 4, An Act Concerning Municipal Electric Utility Cooperatives and Estab-
lishing a Municipal Electric Consumer Advocate, intends to increase public
awareness and provide transparency regarding municipal electric energy co-
operatives, in part by requiring a forensic examination on a regular basis.
We reached out to the our Valuation, Forensic, and Litigation Support Group,
the AICPA, and several members who shared their feedback, including using
the term "forensic examination" instead of "forensic audit" and some informa-
tion regarding what such a forensic examination might include, with the leg-
islature. Unfortunately, as often happens during the last few days of session,
some of the language adopted is of concern to us. We are seeking to modify
the language in the special session and will report back to members.
SB 4 awaits action by the Governor.
SB 4 Language on Forensic Examinations
We have been actively tracking, addressing, and reporting on many proposals and bills relevant to accounting professionals
at the Capitol this session.