California Tax Education Council

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Enforcement: Round 8

Tuesday, April 2, 2013 - 2 comments

As of March 30, 2013, the Franchise Tax Board (FTB) Tax Preparer Enforcement Team has contacted 980 questionable tax preparers statewide. Of those, FTB reports that 36 percent of the cases have been resolved.

California law requires anyone who prepares tax returns for a fee and is not an attorney, certified public accountant (CPA) or enrolled agent (EA), to register as a tax preparer with the California Tax Education Council (CTEC).

Tax preparers who are caught preparing tax returns illegally are issued a $2,500 penalty letter from FTB and have 90 days to comply. If a tax preparer registers with CTEC by the deadline, the penalty is removed. If the tax preparer does not comply or complies late, the $2,500 penalty stands. In the next year, if that tax preparer still fails to comply and continues to prepare tax returns, the penalty increases to $5,000.

So far 113 unregistered tax preparers have been issued the $2,500 penalty for the 2012 enforcement year. FTB reports nine unregistered tax preparers were also issued the $5,000 penalty.

Currently no penalties have been assessed for 2013.

If you have information regarding an unregistered tax preparer, it is never too late to let us know. To report a questionable tax preparer, click on Report a Tax Preparer and fill out the form.

CTEC and FTB partnered in 2005 to help better protect consumers against fraud by enforcing tax preparer compliance. CTEC pays for the entire enforcement program. All penalties collected by FTB are deposited into the state’s general fund.


Suzanna K commented on Wednesday, May 15, 2013

I am a bit confused. Since IRS appeal was competency exam regulation was overturned by the court and IRS has not appealed the decision, do I still have to take the RTPR test as of today? Please let me know. thank YOu

CTEC replied on Thursday, May 16, 2013

No, you do not need to take the IRS test. The only requirement still in effect by the IRS is to renew your PTIN each year.