What to know about California tax preparers and their different areas
SACRAMENTO, Calif.–(BUSINESS WIRE)–California is one of the few states that require paid tax preparers to
be licensed or registered. Each professional has varying levels of
skills and not all of them necessarily deal with preparing tax returns.
“The tax code is way too complex to know everything. Most professionals
have an area of expertise,” said Margy Dunn, chair of the California
Tax Education Council (CTEC), a nonprofit organization that is
required by state law to manage the registration of more than 40,000
unlicensed tax preparers.
So which tax preparer is right for you? It depends on your financial
Any attorney, not just a tax attorney, can prepare your tax return;
however, most attorneys only handle legal issues regarding your taxes.
An attorney has unlimited representation rights to assist clients in
court or before the IRS.
Public Accountant (CPA)- CPAs are required to pass a qualifying
accounting exam, but that does not mean they’re all experts on tax
preparation. For the most part, CPAs can help you create an overall tax
plan and guide you through complex financial situations. If you are
mostly interested in tax preparation help, ask about their experience
with filing tax returns. CPAs also have unlimited representation rights
before the IRS.
Registered Tax Preparer (CRTP)- They must complete a qualifying
education course on federal and state tax laws, pass a test from a
CTEC-approved education provider, and then complete continuing education
requirements each year. They are also required to obtain a $5,000 surety
bond to protect clients against fraud. Because CTEC is a state-based
program, CRTPs have limited representation rights. It means they can
only represent clients before the IRS with tax returns they prepared and
signed. To qualify for limited representation rights, they must obtain a
record of completion from the IRS Annual
Filing Season Program.
Agent (EA)- They are regulated by the federal government. In
fact, some are former IRS employees. Those who did not work for the IRS
are required to pass a comprehensive IRS exam. EAs must also complete
continuing education courses on federal tax laws. Similar to attorneys
and CPAs, they have unlimited representation rights before the IRS.
To get more tips and advice, visit KnowYourTaxPreparer.org.
CTEC is a nonprofit organization that was established in 1997 by the
California State Legislature to protect taxpayers against fraud and
incompetent tax preparers. Taxpayers can report unregistered tax
preparers at ctec.org.
California Tax Education Council
Gigi Jones, 916-296-6913 (cell)