New Rule Strengthens Tax Preparer Enforcement
A stricter rule and more visits to California tax preparation offices are set for 2010
[USPRwire, Mon Feb 08 2010] Unregistered tax preparers are no longer the sole target the California Tax Education Council (CTEC) and its enforcement partner, the Franchise Tax Board (FTB), will focus on each year. Starting this tax season, CTEC plans to suspend, revoke or refuse a registration if a tax preparer or new applicant is found guilty of unprofessional conduct by a government agency or regulatory entity.
In California, paid income tax preparers who are not a licensed attorney, certified public accountant (CPA) or enrolled agent (EA), are required by law to register with CTEC. All CTEC-registered tax preparers (CRTPs) must complete an educational requirement on tax laws and obtain a surety bond to protect clients against fraud.
The new rule will help ensure dishonest tax preparers are excluded from the CTEC database, and in turn, provide better protection for consumers against questionable tax preparers.
Last year the FTB Tax Preparer Enforcement Team discovered that 41 percent of tax preparers it paid visits to did not have the legal qualifications to prepare tax returns. Individuals who are caught preparing tax returns for a fee and cannot be verified as either an attorney, CPA, EA or CRTP, may face penalties up to $5,000 from FTB.
Enforcing tax preparer compliance is an issue the Internal Revenue Service considers to be a top priority. In January, IRS Commissioner Doug Shulman issued a plan to set new registration, continuing education and testing requirements for paid tax preparers. The proposed requirements are similar to what CTEC has been administering in California for more than a decade; however, CRTPs will not be exempt from the IRS requirement.
If a tax preparer cannot be verified as an attorney, CPA, CRTP or EA, consumers are asked to fill out a noncompliant complaint form at www.ctec.org or call (877) 850-2832 for more information.
CTEC is a nonprofit organization that was established in 1997 by the California State Legislature to protect taxpayers by ensuring unlicensed paid tax preparers are registered, educated and bonded. Last year CTEC registered more than 44,000 tax preparers. CRTPs and CPAs are the two largest professional tax preparer groups in California.
California Tax Education Council
Cell: (916) 296-6913
Office: (916) 447-8229