Taft: Who Should Prepare Your Taxes?
By Sandra Anderson, CRTP -
December 30, 2009
With tax season coming up, these questions are on the minds of taxpayers everywhere: Does it matter who files my tax return? Can I hire just anyone who hangs up a sign or designs a website, are there any laws regulating who can prepare taxes for money? Who should file my tax return?
Both the IRS and the State of California regulate tax preparers. According to state law, in order to prepare your taxes a tax preparer must be 1) a CTEC registered tax preparer; 2) a CPA; 3) an Enrolled Agent; or 4) an attorney. Since most tax preparers fall in the first category, in this article I'm going to discuss the requirements for a CTEC registered tax preparer.
What must a person do to become a CTEC registered tax preparer? In order become registered with the California Tax Education Council (CTEC), a tax preparer must complete 60 hours of qualifying tax education. To maintain that registration, the tax preparer must then complete 20 hours of continuing tax education every year. In addition, a tax preparer must maintain a $5000 preparer bond.
How can you tell if your tax preparer is CTEC registered? Ask him or her for proof. Every year, tax preparers are given a compliance certificate and a registration card with their CTEC ID number. You can also go to the CTEC website, HYPERLINK http://www.ctec.org www.ctec.org, and click on Verify a Tax Preparer.
According to the CTEC website, an estimated 5000 people are illegally preparing taxes in California. What are some identifying traits of an illegal tax preparer? You should beware of any tax preparer who asks you to sign a blank tax form. When you sign your tax form, you are certifying that the information you are giving the IRS is correct to the best of your knowledge. There are severe penalties for filing a fraudulent tax return, so signing a blank form is never a good idea. You should also beware of any tax preparer who refuses to sign your tax return. Both the IRS and the state of California require tax preparers to sign their clients' tax returns, as well as give their clients copies of any documents they have signed.
Have you ever seen an advertisement for a company that promises that everyone who uses their service will get a refund? Not only is this false advertising, it is against the law. A reputable tax preparer will never promise this, as it is impossible to know whether or not a taxpayer will receive a refund before processing their information. You should also beware of any tax preparer who charges a fee based on a percentage of your refund, which is also prohibited by law. In fact, you should ask your tax preparer to provide you with a fee schedule and list of services; posting this is actually an IRS requirement. Other questions to ask your tax preparer are whether he or she can be reached year-round in case of a question or problem, and how he or she will securely store your information while having it available to you on request.
So who should prepare your taxes? By asking a few simple questions, you can be sure your tax preparer is reputable, well-trained, and, most important, in compliance with the law.
Both the IRS and the State of California regulate tax preparers. According to state law, in order to prepare your taxes a tax preparer must be 1) a CTEC registered tax preparer; 2) a CPA; 3) an Enrolled Agent; or 4) an attorney. Since most tax preparers fall in the first category, in this article I'm going to discuss the requirements for a CTEC registered tax preparer.
What must a person do to become a CTEC registered tax preparer? In order become registered with the California Tax Education Council (CTEC), a tax preparer must complete 60 hours of qualifying tax education. To maintain that registration, the tax preparer must then complete 20 hours of continuing tax education every year. In addition, a tax preparer must maintain a $5000 preparer bond.
How can you tell if your tax preparer is CTEC registered? Ask him or her for proof. Every year, tax preparers are given a compliance certificate and a registration card with their CTEC ID number. You can also go to the CTEC website, HYPERLINK http://www.ctec.org www.ctec.org, and click on Verify a Tax Preparer.
According to the CTEC website, an estimated 5000 people are illegally preparing taxes in California. What are some identifying traits of an illegal tax preparer? You should beware of any tax preparer who asks you to sign a blank tax form. When you sign your tax form, you are certifying that the information you are giving the IRS is correct to the best of your knowledge. There are severe penalties for filing a fraudulent tax return, so signing a blank form is never a good idea. You should also beware of any tax preparer who refuses to sign your tax return. Both the IRS and the state of California require tax preparers to sign their clients' tax returns, as well as give their clients copies of any documents they have signed.
Have you ever seen an advertisement for a company that promises that everyone who uses their service will get a refund? Not only is this false advertising, it is against the law. A reputable tax preparer will never promise this, as it is impossible to know whether or not a taxpayer will receive a refund before processing their information. You should also beware of any tax preparer who charges a fee based on a percentage of your refund, which is also prohibited by law. In fact, you should ask your tax preparer to provide you with a fee schedule and list of services; posting this is actually an IRS requirement. Other questions to ask your tax preparer are whether he or she can be reached year-round in case of a question or problem, and how he or she will securely store your information while having it available to you on request.
So who should prepare your taxes? By asking a few simple questions, you can be sure your tax preparer is reputable, well-trained, and, most important, in compliance with the law.
