In what can only be described as a wacky, tacky tax bill, Connecticut state Senator Patricia Miller introduced a bill that would require tax preparers to file an amended return at no cost to the taxpayer and be liable for any additional tax, penalties, or interest owed if a taxpayer underpaid income tax due to tax preparer error.1
Just to be clear, this means that if a client fails to tell their tax professional about all their income and signs their income tax return under penalty of perjury (as all taxpayers must do), then the tax professional may be forced into a “he said, she said” argument with the taxpayer of whether all the income was disclosed to the tax professional. And if the tax professional loses, they are on the hook for not only the resulting penalties and interest, but also the additional tax owed?! Tax, I might add, that the taxpayer would be required to pay with or without preparer error.
This Connecticut Senate bill would only incentivize taxpayers to lie to their tax professional and would drive malpractice insurance costs through the roof. Of course, anyone who gives this bill 30 seconds of thought realizes that the issues I just brought up are only the tip of the iceberg.
Almost as crazy as the bill itself, the Connecticut Senate held a public hearing for the bill on February 22, 2023. Of the 79 publicly available comments and testimony, only one person supported the bill. It begs the question what Victoria Mayer, Director of State Government Relations at H&R Block, is thinking! Judging by her LinkedIn profile and work history, she is clearly a policy wonk, and I’d be shocked if she ever prepared an income tax return in her life.
If you’re curious and want to read the public comments yourself, they can be found here: https://bit.ly/3IP6vCy