California Tax Education Council


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AB-1140 Requires CRTPs to Provide Fees Upfront and Inform Clients of Free Tax Services

Tuesday, February 11, 2020 - 8 comments

CALIFORNIA LEGISLATION WOULD DISCRIMINATE AGAINST CALIFORNIA REGISTERED TAX PREPARERS (CRTPs)

A bill is currently in the California legislature that would significantly increase your obligations as a CTEC Registered Tax Preparer (CRTP).  This bill, AB1140 (authored by Assembly Member Mark Stone), would apply to CRTPs only.  It would not apply to a much larger portion of the tax preparation community that includes: Certified Public Accounts (CPAs); Enrolled Agents (EAs); and attorneys.  This bill, if passed in its current form, would require CRTPs to provide clients and potential clients with two disclosures, one before preparing the tax return and one after preparing the tax return.

Notice Before: A written notice would be required before preparing a potential client’s return that includes all of the following information:

  • A standardized disclosure statement informing a potential client with income below sixty-six thousand dollars ($66,000) that they may be eligible for free online tax preparation services, and that an individual with income below fifty-six thousand dollars ($56,000) may be eligible for free in-person tax preparation services through the IRS’s Volunteer Income Tax Assistance (VITA) program. The statement shall also identify the IRS’s internet websites where an individual may find additional information on each program and the Franchise Tax Board’s CalFile internet website.
  • A list of costs and fees charged by the CRTP for usual and customary tax preparation services, including, but not limited to, California Form 3514 and federal Schedule EIC (Form 1040).
  • The CRTP’s federal PTIN number.

Notice After: After completing a tax return, a CRTP would be required to provide a written disclosure signed and dated by the CRTP including:

  • The total cost charged by the tax preparer
  • The CRTP’s contact information and federal preparer number (PTIN)
  • Whether others were involved in preparing the return, their names, contact information and PTINs

Both statements must be signed and dated by the client and retained by the CRTP for a minimum period of three years.

A CRTP who violates these provisions more than once will be subject to a $750 penalty issued by the California Franchise Tax Board.

The full text of the bill can be found here ---> AB-1140 Tax Preparers - Disclosures

If you have concerns about this legislation, please contact your local representative and let your voice be heard.  You can find your representative by going here: http://www.legislature.ca.gov/your_legislator.html Or contact Assembly Member Mark Stone’s Office, as Mr. Stone is the legislator carrying this bill.  

A petition opposing the legislation can also be found here....

His office can be reached here:

 Capitol Office
 State Capitol
 P.O. Box 942849
 Sacramento, CA 95814
 Tel: (916) 319-2029
 Fax: (916) 319-2129

 Santa Cruz County District Office
 701 Ocean Street
 318-B
 Santa Cruz, CA 95060
 Tel: (831) 425-1503
 Fax: (831) 425-2570

Santa Clara County 
 residents may     contact district staff by   calling (408) 782-0647

 Monterey County District Office
 99 Pacific Street
 Ste 575-G
 Monterey, CA 93940
 Tel: (831) 649-2832
 Fax: (831) 649-2935

Comments

Reina Dumas commented on Tuesday, February 25, 2020

My question is WHY?? Most people do not want to mess with going on line to prepare their own. Plus let alone to a volunteer center. Who in heavens name came up with this???


Amanda O. commented on Monday, February 24, 2020

I strongly DISAGREE. Whoever came up with this bill doesn’t make any sense. It is very unfair.


Ilsa B commented on Thursday, February 20, 2020

I think it creates an UNFAIR competitive advantage for CPAs, EAs, and other tax professionals exempt from the billion. Why would you not require CPAs and EAs to do the same as CRTPs?If the purpose of the law is to protect the client, it has to be applied uniformly, the same for everyone. Totally discrimination!

CTEC replied on Friday, February 21, 2020

You can voice your concerns by contacting Assemblyman Stone's office or sign a petition here - https://www.change.org/p/mark-stone-california-legislation-would-discriminate-against-california-tax-return-preparers?cs_tk=AmQbM-PFgdkhPvx4T14AAXicyyvNyQEABF8BvFAqZMkPFAGZj4FIo1SS89Q%3D&utm_campaign=977ff023a0c3421a9c64ab902d314c82&utm_content=initial_v0_0_1&utm_medium=email&utm_source=recruit_sign_digest&utm_term=cs


Debra R commented on Thursday, February 13, 2020

This doesn’t even make sense. What is the point? Not sure what this accomplishes. Plus, it is just unfair that we are being singled out.

CTEC replied on Monday, February 17, 2020

If you disagree, you should contact Assemblyman Mark Stone. There's also a petition for those who oppose - https://www.change.org/p/mark-stone-california-legislation-would-discriminate-against-california-tax-return-preparers?recruiter=1042405761&utm_source=share_petition&utm_medium=copylink&utm_campaign=share_petition


Catherine D commented on Thursday, February 13, 2020

Thank you for making us aware of this! It seems like an important issue for us to take action on.

CTEC replied on Monday, February 17, 2020

You can show your opposition by filling out this petition - https://www.change.org/p/mark-stone-california-legislation-would-discriminate-against-california-tax-return-preparers?recruiter=1042405761&utm_source=share_petition&utm_medium=copylink&utm_campaign=share_petition