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By Lance Chilton
What was it that Ronald Reagan said, “Government isn’t the solution to the problems, it is the
problem.”? Today’s counter-example — to show that good government can be the solution has
to do with consumer protection.
We think of government being able to help protect us from the worst of our fellow citizens’ (and their companies) worst impulses – snake oil salesmen, highway robbers, tobacco industry
charlatans. In this case, let’s talk about predators who supply us with no or misleading
information while they “help us” with our tax returns, the federal tax code being as opaque as it
is.
In 2020, taking note of scams perpetrated by tax preparers on Albuquerque citizens,
Albuquerque’s City Council unanimously passed a “Tax Preparers and Consumer Rights
Ordinance.” The TPCRO, which was sponsored initially by City Councilor Pat Davis, passed unanimously through the Council and was signed by Mayor Keller, part of whose administration had largely drafted the bill. It included such common-sense requirements of prospective tax preparers as
- Requiring tax preparers to disclose their education and qualifications
- Requiring that prospective clients be given an estimate of fees to be charged
- Requiring an explanation of charges in excess of the estimate
- Requiring that preparers review the tax return before it is filed
- Requiring that clients be able to directly receive any tax refund
- Requiring a written agreement between preparer and client, including language indicating
the availability of free tax help (through, for example, United Way of Central New
Mexico and the Senior Citizen Law Center)
- Prohibiting false and misleading statements.
Objections from tax preparers have held up enforcement of the ordinance, which was to have
begun in time for Tax Year 2021 (i.e., April 2022). In November 2021, the City Council passed
an ordinance delaying the enforcement of the previous ordinance until July 1, 2022, and it is
possible that further delays will occur.
Asked to comment, Jazmín Irazoqui-Ruiz, senior attorney at the New Mexico Immigrant Law
Center, indicated that many Albuquerque residents have been affected by under-regulated tax
preparation “services,” especially the immigrant community. “We have seen terrible scenarios
among immigrants in Albuquerque,” Ms. Irazoqui-Ruiz said. Immigrants know that they benefit
from filing properly-prepared taxes, which help them to prove to the Immigration and
Naturalization Service that they are good citizens. But unscrupulous tax preparers representing
themselves as more or different than they really are, may give false information about filing
status, about eligibility of families with children for the Earned Income Tax Credit, and about the eligibility of deductions. In addition, tax preparers may press clients to take out loans, at high and undisclosed interest rates, against anticipated refunds. And of course it’s not just immigrants who suffer from this sort of lack of transparency; many of us have fallen prey to some tax preparers’ lack of scruples. We look forward to enforcement of the ordinance, evidence of the good that government can do. The ordinance is explained further on the City’s website at https://www.cabq.gov/office-of-consumer-protection/tax-preparers-and-consumer-rights-ordinance.
And congratulations to Ms. Irazoqui-Ruiz. A DACA recipient who came to this country at age three, Ms. Irazoqui-Ruiz graduated from the UNM Law School. A recent New Mexico Supreme Court decision indicated that she and others could not be denied a license to practice law due to immigration status. She became the first attorney to receive a conditional license after the Court’s decision. Not all New Mexicans would approve of course.
According to the Albuquerque Journal, “Republican Party Chairman Steve Pearce called the rule change an ‘atrocious action’ and accused the Supreme Court of making a ‘reckless decision’ without public input.”