Current Status Introducing Body:House Bill Number:4759 Primary Sponsor:Wilkes Committee Number:30 Type of Legislation:GB Subject:Income tax returns, electronic filing Residing Body:House Current Committee:Ways and Means Computer Document Number:CYY/19110.SD Introduced Date:Apr 15, 1992 Last History Body:House Last History Date:Apr 15, 1992 Last History Type:Introduced, read first time, referred to Committee Scope of Legislation:Statewide All Sponsors:Wilkes Type of Legislation:General Bill
Bill Body Date Action Description CMN
---- ------ ------------ ------------------------------ ---
4759 House Apr 15, 1992 Introduced, read first time, 30
referred to Committee
View additional legislative information at the LPITS web site.
TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION 12-7-1715 SO AS TO REGULATE THE ELECTRONIC FILING OF INCOME TAX RETURNS INCLUDING PROVISIONS REQUIRING CERTAIN DISCLOSURES BY THE INCOME TAX PREPARER TO THE TAXPAYER, A LIMITATION ON THE DOLLAR AMOUNT OF REFUND ANTICIPATION LOANS WHICH MAY BE MADE, AND TO PROVIDE PENALTIES FOR VIOLATION.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. (A) The General Assembly makes the following findings:
(1) The Internal Revenue Service has authorized income tax preparers to file income tax returns electronically for income taxpayers.
(2) Many taxpayers purposely cause excessive deductions to be withheld from their paychecks each payday resulting in an overpayment of income taxes each year.
(3) This overpayment entitles the income taxpayer to a refund of the overpayment of taxes when the taxpayer files his income tax return each year.
(4) The Internal Revenue Service, recognizing the desire of some income taxpayers to receive the proceeds of their income tax refunds rapidly, has authorized tax preparers to cause an agreement to be signed by the taxpayer authorizing the Internal Revenue Service to wire refund proceeds to a bank.
(5) The bank makes the taxpayer a loan, usually within three to five days, in the form of a cashier's check. The loan is guaranteed by the refund check.
(6) Fees and charges are assessed by the income tax preparer for these services, and in some cases are exorbitant, excessive, and far exceed any relationship to the service performed or benefit received by the taxpayer.
(B) The General Assembly recognizes that most income tax preparers are highly skilled and highly professional in their work, and does not wish to impose undue burdens on them. However, in order to address the abuses associated with refund anticipation loans resulting from electronic filing of income tax returns, the General Assembly has determined to enact the provisions of this act.
SECTION 2. The 1976 Code is amended by adding:
"Section 12-7-1715. (A) A person who is an income tax return preparer as defined in Section 7701(a)(36) of the Internal Revenue Code of 1986 who assists a taxpayer in an electronic filing of his income tax return where a loan is made to the taxpayer pending receipt of his refund shall disclose to the taxpayer that the income tax refund the taxpayer is receiving is the taxpayer's own money and results from an overpayment of withholding during the tax year from the taxpayer's paycheck or from other explained reasons. He shall also explain that the funds the taxpayer receives in anticipation of his refund is a loan from a financial institution or other person and not a refund. The taxpayer shall sign a statement acknowledging these facts.
(B) Finance and other charges for refund anticipation loans including loan application fees must be disclosed to the taxpayer with a stated annual percentage rate.
(C) Refund anticipation loans are limited to a maxium of three thousand three hundred dollars.
(D) Nothing contained in this section may be construed to limit or curtail any provisions of the Consumer Protection Code and must be considered supplemental thereto.
(E) Any income tax preparer who violates any provision of this section is guilty of a misdemeanor and upon conviction must be fined not more than two thousand dollars or imprisoned for not more than ninety days, or both. Each violation constitutes a separate offense."
SECTION 3. This act takes effect upon approval by the Governor.