California is one of the few states that require tax preparers to be
licensed or registered
SACRAMENTO, Calif.–(BUSINESS WIRE)–Verifying the legal status of a tax preparer may seem obvious, yet each
year too many taxpayers will still make their choice on a whim.
“A lot of people tend to get hooked on promises that sound good, but
really have no validity. More times than not, they end up in trouble
because of it,” said Margy Dunn, chair of the California
Tax Education Council (CTEC), a state-mandated nonprofit
organization that manages the registration of more than 40,000
unlicensed tax preparers.
Unlike most states, California has set strict standards for paid tax
preparers. California law requires anyone who prepares tax returns for a
fee to be either an attorney, certified public accountant (CPA), CTEC-registered tax preparer (CRTP) or enrolled agent (EA).
Anyone caught preparing tax returns without a legal designation is
breaking state law and may face penalties up to $5,000 from the
California Franchise Tax Board.
“The state can go after those tax preparers, but there is no law that
exempts the victim from any damage caused by them,” said Dunn. “That’s
why it’s so important to know who you’re dealing with.”
Although professional tax preparers are required to sign your tax return
to show proof of work, it is still you, the taxpayer, who is
ultimately responsible for all information listed on the tax return—no
matter if it is right, wrong or even fraudulent.
“Unfortunately most people don’t pay much attention to the legal status
of their tax preparer until after a problem comes up,” said Celeste
Heritage, CTEC administrator.
In addition to state rules, the Internal
Revenue Service also requires paid tax preparers to register for a Preparer
Tax Identification Number (PTIN). Tax preparers must include their
PTIN on every federal tax return they prepare for clients.
“Your tax return is one of the most important financial transactions
you’ll make this year. Why risk it?” said Heritage.
For more tips and advice, visit KnowYourTaxPreparer.org.
CTEC is a nonprofit organization that was established in 1997 by the
California State Legislature to protect taxpayers against fraud and
incompetent tax preparers. Visit ctec.org
or call (877) 850-CTEC for more information.
California Tax Education Council
Gigi Jones, 916-296-6913 (cell)