71st OREGON LEGISLATIVE ASSEMBLY--2001 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 900
B-Engrossed
Senate Bill 301
Ordered by the House April 9
Including Senate Amendments dated February 26 and House
Amendments
dated April 9
Printed pursuant to Senate Interim Rule 213.28 by order of the
President of the Senate in conformance with presession filing
rules, indicating neither advocacy nor opposition on the part
of the President (at the request of Governor John A. Kitzhaber,
M.D., for State Board of Tax Service Examiners)
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure.
Changes name of State Board of Tax Service Examiners to State
Board of Tax Practitioners.
Expands enforcement capabilities of State Board of Tax
Practitioners. Increases civil penalty maximum. Describes
authority of board to keep information gathered during
investigation confidential.
Modifies requirements for keeping records of income tax returns
prepared for others.
A BILL FOR AN ACT
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. + }
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