First complete 60-hours (45 hours federal and 15 hours state) of qualifying tax education from a CTEC Approved Provider
Obtain a PTIN (Preparer Tax Identification Number) from the IRS
Purchase a $5,000 tax preparer bond
Register with CTEC within 18 months from the completion date on the certificate of completion
Registration Fee with CTEC $33
Complete 20-hours (10 hours federal tax law, 3 hours federal tax update, 2 hours of Ethics and 5 hours for State) of continuing tax education each year
Maintain a valid PTIN (Preparer Tax Identification Number) from the IRS
Maintain a $5,000 tax preparer bond
Renew the registration by October 31st of each year
Renewal Registration with CTEC $33
California law requires anyone who prepares tax returns for a fee within the State of California and is not an exempt preparer to register as a tax preparer with the California Tax Education Council (CTEC). Exempt preparers are California certified public accountants (CPAs), enrolled agents (EAs), and attorneys who are members of the State Bar of California.
As of January 1, 2005, the California Franchise Tax Board (FTB) has the authority to identify and penalize unregistered tax preparers.
"Failure to register as a tax preparer with the California Tax Education Council, as required by Section 22253 of the Business and Professions Code, unless it is shown that the failure was due t reasonable cause and not due to willful neglect.
(1) The amount of the penalty under this subdivision for the first failure to register is two thousand five hundred dollars ($2,500). This penalty shall be waived if proof of registration is provided to the Franchise Tax Board within 90 days from the date notice of the penalty is mailed to the tax preparer.
(2) The amount of the penalty under this subdivision for a failure to register, other than the first failure to register, is five thousand dollars ($5,000)."
Consumers can report unregistered tax preparers by filling out the Noncompliant Complaint Form through CTEC's website. All reports are kept confidential.
See the table below for more information:
|If you:||And you:||Does the state of California require CTEC registration?|
|Are an inactive CPA or are a non-California CPA||Prepare income tax returns for a fee in California||Yes, or you must resume/become an active California CPA|
|Work for an exempt tax preparer||Sign the income tax return||Yes|
|Do not sign the income tax return (exempt tax preparer is the responsible party)||No|
|Work for a CTEC Registered Tax Preparer (CRTP)||Take income tax data from a client and enter it into a computer (whether in person or other contact)||Yes|
|Have no contact with clients and perform the clerical function of inputting tax information into the computer for your employer||No|
|Are a nonexempt tax preparer||Take income tax data from a client and enter it into a computer and/or prepare the income tax return||Yes|
|Are a nonexempt tax preparer who prepares income tax returns that are bundled or included with other services||Receive a fee for the bundle of services which include the preparation of the income tax return||Yes|
|Are an employee of a business unrelated to income tax return preparation||Prepare (or assist with preparation of) the company's business income tax return||No|
|Compile the company's business income tax information for submission to a paid tax preparer who will prepare the income tax return||No|