Sec. 12-790. Persons providing tax preparation services and facilitators. Definitions. Prohibited activities. Penalty.

(a) As used in this section:

(1) “Attorney” means an attorney admitted to practice law in this state or one or more of the other states or jurisdictions of the United States;

(2) “Certified public accountant” means a certified public accountant licensed pursuant to chapter 389 or a similar law of one or more of the other states or jurisdictions of the United States;

(3) “Commissioner” means the Commissioner of Revenue Services or the commissioner's designee;

(4) “Creditor” means any person who makes a refund anticipation loan or who takes an assignment of a refund anticipation loan;

(5) “Facilitator” means a person that individually or in conjunction or cooperation with another person: (A) Solicits the execution of, processes, receives or accepts an application or agreement for a refund anticipation loan or refund anticipation check; (B) serves or collects upon a refund anticipation loan or refund anticipation check; or (C) in any other manner, facilitates the making of a refund anticipation loan or refund anticipation check. “Facilitator” does not include any employee of a facilitator who provides only clerical or other comparable support services to such facilitator;

(6) “Person” has the same meaning as provided in section 12-1;

(7) “Refund anticipation check” means a check, debit card, stored value card or other payment mechanism that: (A) Represents the proceeds of a federal or state personal income tax refund; (B) is issued by a bank or other person that received a direct deposit of the tax refund or tax credits; and (C) is paid for by a fee or other consideration;

(8) “Refund anticipation loan” means a loan that is secured by or that the creditor arranges to be repaid directly or indirectly from the proceeds of a federal or state personal income tax refund. “Refund anticipation loan” includes any sale, assignment or purchase of such tax refund at a discount or for a fee, whether or not the amount is required to be repaid to the buyer or assignee if the Internal Revenue Service or the Department of Revenue Services denies or reduces the amount of the tax refund;

(9) “Return” means a tax return or report relating to the federal or state personal income tax administered by the Internal Revenue Service or the Department of Revenue Services;

(10) “Tax preparation services” means the preparation of or assistance in the preparation of another person's federal or state personal income tax return, for a fee or other consideration; and

(11) “Tax preparer” means an individual who provides federal or state personal income tax preparation services for a fee or other consideration.

(b) (1) No person that provides tax preparation services or acts as a facilitator shall:

(A) Impose any fee or other consideration in the making or facilitating of a refund anticipation loan or refund anticipation check other than the fee charged by the creditor or bank that originated such loan or check;

(B) Engage in unfair or deceptive acts or practices in the making or facilitating of a refund anticipation loan or refund anticipation check, including making any written or oral statement that contradicts any information required to be disclosed under the Taxpayer Bill of Rights, as set forth in the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as amended from time to time, or the Connecticut Taxpayer's Bill of Rights, as set forth in section 12-39n;

(C) Directly or indirectly arrange for a third party, other than the originating creditor or bank, to impose any interest, fee or charge related to a refund anticipation loan or refund anticipation check;

(D) Include any of the following provisions in any documents provided with respect to a refund anticipation loan or refund anticipation check, including in the loan application or agreement: (i) A hold harmless clause; (ii) a confession of judgment clause; (iii) any assignment of or order for payment of wages or other compensation for services; (iv) a waiver of any provision of the Taxpayer Bill of Rights or the Connecticut Taxpayer's Bill of Rights; or (v) a waiver of the right to injunctive, declaratory or other equitable relief or relief on a class-wide basis;

(E) Take or arrange for a creditor to take a security interest in any property interest of the taxpayer other than the proceeds of the tax refund to secure payment of a refund anticipation loan;

(F) Engage in the collection of an outstanding or delinquent refund anticipation loan for any creditor or assignee;

(G) Make a material misrepresentation of fact in obtaining or attempting to obtain a permit under section 12-790a;

(H) Fail or refuse to return to a taxpayer, within a reasonable period of time, any documents or copies of such documents provided by the taxpayer;

(I) Fail or refuse to provide to a taxpayer, for the taxpayer's own records, a copy of any document requiring the taxpayer's signature, within a reasonable time after the taxpayer signs the document;

(J) Fail to maintain a copy of any return prepared for a taxpayer for a period of four years from the date of completion or the due date of the return, whichever is later;

(K) Require or allow a taxpayer to sign blank or incomplete tax forms;

(L) Require a taxpayer to designate the tax preparer or facilitator as the payee for a federal or state personal income tax refund; or

(M) Require a taxpayer to designate and use a specific depository institution or debit card or stored value card provider for the purposes of receiving a federal or state personal income tax refund.

(2) Each tax preparer preparing any return shall sign the return and include his or her preparer tax identification number issued by the Internal Revenue Service.

(3) The commissioner may impose on any person providing tax preparation services or acting as a facilitator that violates any provision of subdivision (1) or (2) of this subsection a civil penalty of not more than five hundred dollars for each violation. Subject to the provisions of section 12-3a, the commissioner may waive all or part of the penalty provided under this subdivision when it is proven to the commissioner's satisfaction that the violation was due to reasonable cause and not intentional or due to neglect.

(P.A. 17-147, S. 15.)