Chapter 40

COL07030711GCA FINANCE &TAXATION CH.40REGISTRATION ,BONDING AND REGULATION OF TAX PREPARERS 1CHAPTER 40 REGISTRA TION ,BONDING AND REGULA TION OF TAX PREPARERS § 40101. Short Title. § 40102. Definitions. § 40103. Exemptions. § 40104. Enforcement & Administration. § 40105. Application for Examination; Registration. § 40106. Registration: Eligib ility and Qualification. § 40107. Same: Effective Date and Penalty . § 40108. Same: Denial, Revocation, Suspension and Withdrawal. § 40109. Same: Notice of Denial. § 40110. Injunctions Restraining V iolation. § 40111. Civil Action. § 40112. Severabilit y. § 40113. Bonds Required. § 40114. Same: Penalty . § 40115. Advertising Prohibited. § 40116. Distribution of Revenue. § 40117. Amount of Annual Fees. NOTE: GC § 53650, et seq., appeared in Title L VI,, 1970 Ed. in Chapter I, Hotel Corporation; these section numbers were again used when The T ax Preparer Act was enacted by P .L. 13 -92, as is reflected in source notes for the following chapter. Title L VI, concerning Hotel Corporation, was re pealed by P .L. 16 -87. § 40101. Short Title . This Chapter may b e cited as the Tax Preparer Act. SOURCE : GC § 53640, as added by P .L. 13 -92.

ter. Title L VI, concerning Hotel Corporation, was re pealed by P .L. 16 -87. § 40101. Short Title . This Chapter may b e cited as the Tax Preparer Act. SOURCE : GC § 53640, as added by P .L. 13 -92. § 40102. Definitions . As used in this Chapter: (a) Tax preparer means a person, who for a fee assists with or prepares tax return for others, but does not mean an employ ee, representative, partner agent, officer or member of a registered tax preparer ’soffice . (b) Division means the appropriate Division within the Department of Revenue and Taxation. COL07030711GCA FINANCE &TAXATION CH.40REGISTRATION ,BONDING AND REGULATION OF TAX PREPARERS 2(c) Director means the Director of the Department of Revenu e and Taxation. (d) Feemeans any money or valuable consid eration paid or prom ised to be paid for services rendered or to be rendered by any tax preparer . (e) Person means an individual, firm, part nership, associa tion, joint venture or corporation. (f) Tax return means any return, declara tion, statement, refund claim or other document required to be made or filed in connection with territorial or Federal taxes or bank or corpora tion franchise tax.

ax return means any return, declara tion, statement, refund claim or other document required to be made or filed in connection with territorial or Federal taxes or bank or corpora tion franchise tax. SOURCE : GC § 53641, as added by P .L. 13 -92. § 40103. Exemptions . The following persons are exempt from the requirements of this Chapter: (a) Any person regulated by the Board of Public Accoun tancy; (b) Any person who is a member of the Guam Bar Associa tion; (c) Any trust company or trust business; (d) Any person who is authorized to practice before the Internal Revenue Service pursuant to Subpart A commencing with §10.1 of Part 10 of Title 31 of the Code of Federal Regula tions. SOURCE : GC § 53642, as added by P .L. 13 -92. CROSS -REFERENCES: See 7 GCA §9214(c)(4) for the law exempting certain tax preparers from the prohibition against the illegal practice of law . § 40104. Enforcement & Administration . The duty of enforcing and administering this Chapter is vested in the Director, who shall promulgate appropriate rules and regula tions for the imple mentation of this Act. Every power granted or duty imposed upon the Director by this Chapter may be exercised or performed in

or, who shall promulgate appropriate rules and regula tions for the imple mentation of this Act. Every power granted or duty imposed upon the Director by this Chapter may be exercised or performed in the name of t he Dir ector by such subordinate officials of the Department of Revenue and Taxation a s he ma y det ermine to be necessary for the efficient and effective administration and operation of the Tax Preparers Act. (a) W ith the approval of the Director, they may adopt rules and regulations as he determines are reasonably neces sary to carry out COL07030711GCA FINANCE &TAXATION CH.40REGISTRATION ,BONDING AND REGULATION OF TAX PREPARERS 3the pur poses of this Chapter . Such rules and regula tions shall b e adopted pursuant to the Administrative Adjudica tion Law . (b) The Director shall maintain a record of registered tax preparers. The record shall include the names and addresses of the tax preparer and locations used by all registered tax preparers; which list is a public record and open to public inspection at reasonable times. (c) The Director shall, on his own initiative or in response to complaints, investigate and gather evidence of vi olations of this Chapter and of

rd and open to public inspection at reasonable times. (c) The Director shall, on his own initiative or in response to complaints, investigate and gather evidence of vi olations of this Chapter and of any rule or regulation adopted pursuant to this Chapter by any tax preparer, whether registered or not, and by any employee, part ner, officer, agent or member of any tax prepa ration office. SOURCE : GC § 53643, as added by P.L. 13 -92. § 40105. Application for Examination; Regis tration . (a) Every tax preparer shall take an examination of not less than fifty (50) questions which will be prepared by the Director of such division or organizational unit or board as he may des ignate. To qualify , each preparer must receive a passing grade of at least seventy percent (70%). (b) Every tax preparer shall register upon forms prescribed by the Director of the division designated by him. The form shall contain sufficient information to identify the tax prepar er, including name, address, identification numbers and other identifying data which is prescribed by the Director . (c) Any tax preparer maintaining more than one business location shall be permitted to file a single form which, in

tification numbers and other identifying data which is prescribed by the Director . (c) Any tax preparer maintaining more than one business location shall be permitted to file a single form which, in addition to the information required in § 40104(b), clearly designates each location, identifying one location as the principal location and all others as additional locations, and the individual or individuals in charge of each location. (d) If any o f the infor mation required by this Section changes, the tax preparer shall promptly notify the Director of the changes. (e) Exam ination Fee. A non -refundable examination fee of One Hundred Dollars ($100.00) shall be paid by each person applying to take COL07030711GCA FINANCE &TAXATION CH.40REGISTRATION ,BONDING AND REGULATION OF TAX PREPARERS 4the Income Tax Preparer examination. The Director may increase such fees commensurate with costs incidental to such exam. (f) An unsuccessful examinee may be re -examined as follows: (1) Second test thirty (30) days after first exam; (2) Third test thirty ( 30) days after second exam; (3) Thereafter the examinee may be re -examined ever y six (6) months. SOURCE : GC § 53644, added by P .L.

test thirty (30) days after first exam; (2) Third test thirty ( 30) days after second exam; (3) Thereafter the examinee may be re -examined ever y six (6) months. SOURCE : GC § 53644, added by P .L. 13 -92; Subsections (e) & (f) added by P .L. 13-208.Subsection (e) repealed and reenacted by P .L. 29 -002:V :I:19 (May 18, 2007 ). § 40106. Registration: Eligibility and Qualifi cation . Upon receipt of the form properly filled out, and receipt of the required fee, and receipt of proof of deposit of the bond required by this Chapter, if the Director determines that the applicant is eligible, he shall validate the regis tration and send a proof of such valid registra tion to the tax preparer . (a) Every registration shall cease to be valid on June 30 of each year, unless the tax prepar erhas paid the renewal fee required by this Chapter. SOURCE : GC § 53645, as added by P .L. 13 -92. § 40107. Same: Effective Date and Penalty . On or after July 1, 1976, it shall be unlawful for any person to be a tax preparer unless such person is registered in accordance with the provi sions of this A ct.

Same: Effective Date and Penalty . On or after July 1, 1976, it shall be unlawful for any person to be a tax preparer unless such person is registered in accordance with the provi sions of this A ct. Any person who violates this Section is guilty of a petty misdemeanor for each violation of this Section. SOURCE : GC § 53646, as added by P .L. 13 -92, amended by P .L. 13 -187:248:1. § 40108. Same: Denial, Revocation, Suspen sion and With drawal . (a) The Director may refuse to validate or may suspend or revoke, temporarily or permanently , the registra tion of tax preparer for any of the following acts or omissions relating to preparing tax returns for others for a fee which are done by the tax preparer or any employee, representative, partner, agent, officer or member of the tax preparation office: COL07030711GCA FINANCE &TAXATION CH.40REGISTRATION ,BONDING AND REGULATION OF TAX PREPARERS 5(1) Making or authorizing the making of any oral or written statement or representa tion, which is intended to induce persons to use the tax preparation servic e of the tax preparer, which statement or representation is fraudu lent, untrue or misleading.

tten statement or representa tion, which is intended to induce persons to use the tax preparation servic e of the tax preparer, which statement or representation is fraudu lent, untrue or misleading. (2) Obtaining the signature of a customer on a tax return or authorizing documents which contain blank spaces to be filled in after the signature has been obtai ned. (3) Failing or refusing to give a custom er, for his own records, a copy of any document requiring his signature, within a reasonable time after the customer signs such document. (4) Failing to maintain a copy of any tax return prepared for a custome r for the appli cable statue of limitation period. (5) Engaging in any fraudulent conduct. (6) V iolating the advertising prohibitions set forth in this Chapter . (7) Failing to promptly report changes in the informa tion required by § 40105(d). (8) V iolating the provisions of §7216 of the Guam Income Tax Laws. (9) Failing to post the proof of valid registration supplied by the Dir ector in each tax preparer location. (10) Failing to sign a customer ’stax return as pre scribed by the Director .

me Tax Laws. (9) Failing to post the proof of valid registration supplied by the Dir ector in each tax preparer location. (10) Failing to sign a customer ’stax return as pre scribed by the Director . (11) Fail ing to represent taxpayers in audit or other conferences required by the Director, provided that such conferences shall be only for the purpose of discussing the client’ s tax return as prepared by the tax preparer; further provided that nothing in this pro vision shall be construed as giving authority to the tax preparer to represent a client in any legal proceedings before a court of law . (b) In addition to the grounds specified in Subsection (a), the Director may refuse to validate or may suspend or revok e, temporarily or permanently , the registration of a tax prepar erif he has been convicted of a felony having as one of its necessary elements a fraudulent act or an act of dishonesty or a breach of trust and the time for appeal has elapsed or the judgmen t of conviction has been affirmed on appeal, irrespec tive of COL07030711GCA FINANCE &TAXATION CH.40REGISTRATION ,BONDING AND REGULATION OF TAX PREPARERS 6an order granting probation following such conviction, or

on has been affirmed on appeal, irrespec tive of COL07030711GCA FINANCE &TAXATION CH.40REGISTRATION ,BONDING AND REGULATION OF TAX PREPARERS 6an order granting probation following such conviction, or suspending the imposition of sentence or of a subsequent order under the provisions of the Criminal Procedure Code allowing such person towithdraw his plea of guilty or setting aside the plea or verdict of guilty , or dismissing the accusation of information. SOURCE : GC § 53647, added by P .L. 13 -92, amended by P .L. 13 -187:248:2. § 40109. Same: Notice of Denial . If the Direc tor refuses to validate a registration, he shall notify the applicant by personal service or registered mail, return receipt requested, mailed to the address as shown on the registration form. In the event such notice is given, the applicant shall be given a hearing if he files a written request with the Director within sixty (60) days after the notice is given. (a) All hearings relating to a refusal to validate a registra tion or revocation or suspen sion of a registration shall be conducted pursu - ant to Article 2 of 5 GCA Chapter 9.

the notice is given. (a) All hearings relating to a refusal to validate a registra tion or revocation or suspen sion of a registration shall be conducted pursu - ant to Article 2 of 5 GCA Chapter 9. (b) The expiration of a valid registration shall not deprive the Director of jurisdiction to proceed with any investigation or disciplinary proceeding against a tax preparer or to render a decision invalidating, revoking or suspending a regi stration. SOURCE : GC § 53648, as added by P .L. 13 -92. § 401 10. Injunctions Restraining Violation . A judge of the Superior Court, may upon a petition filed by the Director, issue an injunction or other appropriate order restraining conduct in violation o f provisions of this Act or other regula tions adopted pursuant to this Chapter . The proceedings under this Section shall be governed by the Code of Civil Procedure, Chap ter III, Title VII, except that no undertaking shall be required and the Director sha ll not be required to allege facts necessary to show or tending to show lack of an adequate remedy at law or irreparable injury . SOURCE : GC § 53649, as added by P .L. 13 -92. § 401 11. Civil Action .

not be required to allege facts necessary to show or tending to show lack of an adequate remedy at law or irreparable injury . SOURCE : GC § 53649, as added by P .L. 13 -92. § 401 11. Civil Action . Nothing in the provi sions of this Chapter shall prohibit the bringing of a civil action against a tax preparer by an individual. SOURCE : GC § 53650, as added by P .L. 13 -92. § 401 12. Severability . COL07030711GCA FINANCE &TAXATION CH.40REGISTRATION ,BONDING AND REGULATION OF TAX PREPARERS 7If any provision of this Chapter or application thereof to any person or circumstance is held unconstitutional, th e remainder of the Chapter and the applica tion of such provision to other persons or circumstances shall not be affected thereby . SOURCE : GC § 53651, as added by P .L. 13 -92. § 401 13. Bonds Required . A tax preparer shall deposit with the Division, prior to registra tion or registration renewal, a cash or surety bond issued by an insurer licensed on Guam in the penal sum of One Thousand Dollars ($1,000.00). The bonds required by this Sec tion shall be payable to the General Fund on behalf of the people of Guam and shall contain the condi tion that the person applying for regis

usand Dollars ($1,000.00). The bonds required by this Sec tion shall be payable to the General Fund on behalf of the people of Guam and shall contain the condi tion that the person applying for regis tration or registration renewal shall comply with this Chapter and shall pay all damages occa sioned to any person by reason of misstatement, misrepresenta tion, fraud, deceit or any unlawful acts or omissions by the tax preparer or its agents or employees while acting in the scope of their employment or agency . The aggregate liability of the surety shall in no event exceed the penal sum of the bond. SOURCE : GC § 53652, as added by P .L. 13-92. § 401 14. Sam e: Penalty . If any tax preparer fails to file a new bond with the division within thirty (30) days after notice of cancellation by the surety of the bond required under § 40113 the registration under this Chapter shall be suspended u ntil such time as a new bond is filed. A person whose registration is suspended pursuant to this Section shall not, for a fee, assist with or prepare the income or franchise tax returns of others during the period of such suspension. SOURCE : GC § 53653, as added by P .L. 13 -92. § 401 15.

this Section shall not, for a fee, assist with or prepare the income or franchise tax returns of others during the period of such suspension. SOURCE : GC § 53653, as added by P .L. 13 -92. § 401 15. Advertising Prohibited . No tax preparer or employ ee, representative, partner, officer, agent or member of a tax preparer firm shall make, or authorize the making of any r eference to the registration required by this Chapte r in any advertising medium. Advertising medium shall include but shall not be limited to newspapers, magazines, leaflets, phone directory listings, city directory listings, radio and televi sion broadcasts, recorded telephone messages, transit ads, billbo ards and signs. The posting of a proof of COL07030711GCA FINANCE &TAXATION CH.40REGISTRATION ,BONDING AND REGULATION OF TAX PREPARERS 8valid registration, supplied by the Director in the tax preparer ’soffice shall not constitute a violation of this Section. SOURCE : GC § 53654, as added by P .L. 13 -92. § 401 16. Distribution of Revenue. All fees a nd revenues collected pursuant to this Chapter shall be paid into the General Fund. SOURCE : GC § 53655, as added by P .L. 13 -92. § 401 17.

.L. 13 -92. § 401 16. Distribution of Revenue. All fees a nd revenues collected pursuant to this Chapter shall be paid into the General Fund. SOURCE : GC § 53655, as added by P .L. 13 -92. § 401 17. Am ount of Annual Fees . The fees prescribed by this Chapter shall be set by the Director in the amount estimated to pr ovide for the administration of this Chapter within the limits of the following schedule: (a)The tax preparer registration fee shall be established by the Dir ector at a sum not less than One Hundred Dollars ($100.00). (b)If a tax preparer maintains mor e than one (1) tax preparer location, an additional fee shall be established by the Director at a sum not to exceed One Hundred Dollars ($100.00) for the principal location and Fifty Dollars ($50.00) for each additional location. (c)If a tax preparer has employees, representatives, partners, agents, officers or members who would be subject to registration under this Chapter but for the exemptions provided in §40103, an additional fee shall be established by the Director at a sum not to exceed the followin g: (1) Two Hundred Dollars ($200.00) if the tax preparer has less than fifty (50) such persons.

d in §40103, an additional fee shall be established by the Director at a sum not to exceed the followin g: (1) Two Hundred Dollars ($200.00) if the tax preparer has less than fifty (50) such persons. (2) One Thousand Dollars ($1,000.00) if the tax preparer has fifty (50) or more but less than one hundred (100) persons. (3) Two Thousand Dollars ($2,000.00) if the tax preparer has one hundred (100) or more but less than five hundred (500) such persons. (4) Three Thousand Dollars ($3,000.00) if the tax preparer has five hundred (500) or more such persons. SOURCE : GC § 53656, as added by P .L. 13 -92.Amended by P .L. 29 -002:V :I:20 (May 18, 2007). ----------