SB402 Alabama 2016 Session

Updated Feb 27, 2026

Notable

Summary

Primary Sponsor: Tim MelsonSenator
Republican
Session: Regular Session 2016
Title: Individual tax preparers, registration, penalties for violations, Alabama Taxpayer Protection and Assistance Act Advisory Council estab.
Summary: SB402 would create a statewide registration and regulatory system for individual tax preparers in Alabama, with fees, disclosures, enforcement, and a dedicated fund to support administration and outreach.
What This Bill Does
It establishes a registration program for individuals who prepare Alabama tax returns, prohibiting unregistered persons from providing tax preparation services. Registrants would pay fees, may need to pass an exam, and must meet minimum qualifications and continuing education requirements to maintain registration and receive an Alabama ID number. The bill creates the Individual Tax Preparers Fund to cover enforcement and outreach costs, and gives the Department of Revenue power to investigate violations and seek penalties, including injunctions and civil penalties. It also requires disclosures to consumers and annual reporting on program activity beginning in 2018.

Who It Affects
Tax preparers who provide Alabama personal income tax return services and are not exempt would need to register, meet qualifications, and renew annually.
Consumers who hire tax preparers would receive required disclosures and be protected by regulatory enforcement and potential penalties for violations.
CPAs, Enrolled Agents, and attorneys (and their supervised personnel acting within scope) are exempt from registration under this act.
The Department of Revenue and the new Individual Tax Preparers Fund would oversee registration, enforcement, and outreach activities, including supporting low-income taxpayers.

Key Provisions
Establishes the Alabama Taxpayer Protection and Assistance Act to regulate individual tax preparers and prohibit unregistered services.
Defines terms (consumer, department, fund, individual tax preparer, registration, etc.) and sets that registration is required before offering tax preparation services.
Exempts CPAs, Enrolled Agents, and attorneys (and supervised personnel within scope) from registration requirements.
Sets minimum registration requirements (age, no felony conviction, education, eligibility, and passing an exam) and issues an Alabama registration number upon approval and payment of fees.
Creates the Individual Tax Preparers Fund to cover administration, enforcement, and outreach, with funds sourced from registration fees and other appropriations; excess for outreach to low-income taxpayers.
Allows the Department to investigate complaints, issue subpoenas, and seek injunctions or other remedies for violations; imposes civil penalties (including $100 per violation) for certain acts.
Requires pre-service disclosures to consumers, seven years of record retention, and prohibition on misleading advertising or improper handling of tax information.
Mandates continuing education and annual renewal of registrations, plus an annual public report starting July 1, 2018 detailing program activity.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.
Subjects: Tax Preparers