Regarding the article “New Preparer Requirements Coming” [Feb. 28, p.9], the article states, “Generally, four types of people can prepare your taxes: CPAs, Enrolled Agents, attorneys and “none of the above.” Since 1997, California has set registration requirements for tax preparers who are not attorneys, CPAs or enrolled agents. State law requires that anyone who is not one of those three professionals must register as a tax preparer with the California Tax Education Council (CTEC).
Anyone caught breaking this law may face penalties up to $5,000 from the state Franchise Tax Board (FTB), CTEC’s enforcement partner. CTEC and FTB have been working together since 2005 to identify and penalize illegal tax preparers.
The article also states that, “Until recently, anyone could rent out office space and open up Joe’s Income Tax Service. There was no requirement of continuing education and no mandatory system of registration to track these tax preparers. Obviously, this has caused problems over time.”
In California, CTEC-registered tax preparers are required to complete 60 hours of qualifying education from an approved education provider, pass a competency exam, obtain a $5,000 tax preparer surety bond and complete a minimum of 20 hours of continuing education (state and federal tax laws) each year. CTEC-registered tax preparers are required to renew their registration annually. They cannot register or renew until all those requirements have been completed.
It is also important to note that the CTEC program was actually used as a model for many of the new IRS requirements the article referred to. CTEC and FTB were invited to give testimony to IRS Commissioner Doug Shulman in September 2009 on how to establish a federal program. Most of CTEC’s recommendations were implemented into the new IRS plan.
--Gigi Campo, PR director, California Tax Education Council, www.ctec.org