Paid tax preparers who don’t sign tax returns are one of the biggest
threats to taxpayers
SACRAMENTO, Calif.–(BUSINESS WIRE)–#2017taxseason–It is a problem that continues to haunt federal and state enforcement
teams every tax season. Tax preparers who set up a storefront during tax
season, serve countless taxpayers and disappear right after the tax
“Enforcement teams have very little information to go on because the
paper trail is so weak. They never sign the tax returns or stay in one
place. They are definitely masters of the disappearing act,” said Lester
Crawford, 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.
Tax preparers are required by law to sign (typed or handwritten) federal
and state tax returns they prepare for a fee.
California is one of the few states to set standards for professional
tax preparers. State law requires anyone who prepares tax returns for a
fee to be either an attorney,
public accountant (CPA), CTEC-registered
tax preparer (CRTP) or enrolled
agent (EA). Each professional must pass an initial test and follow
educational requirements. Tax preparers who do business without a legal
designation may face penalties up $5,000 from the California
Franchise Tax Board (FTB).
In addition to California requirements, tax preparers are required by
Revenue Service to provide a Preparer
Tax Identification Number (PTIN) on all federal tax returns they
prepare for a fee.
“I think people get scared about reporting tax preparers because they
feel like they’ll get in trouble or are just embarrassed they got taken
for a ride,” said Esperanza Escobedo, CRTP and CTEC board member. “But
enforcement teams rely on reports from taxpayers.”
Beware of tax preparers that…
List “self prepared” on the tax return instead of signing it with
their individual name.
Stick a business label on the tax return instead of signing it by
name. Clients get the “label” copy so it looks as though they signed
it; however, a blank copy without a business label is often filed.
Claim they “forgot” to sign the tax return and promise to sign it
after you’ve paid them.
Taxpayers can report tax preparers at ctec.org
or visit reporttaxpreparerfraud.org
for more tips. CTEC is a nonprofit organization that was established in
1997 by the California State Legislature to protect taxpayers against
fraud and incompetent tax preparers.
California Tax Education Council
Gigi Jones, 916-296-6913