Should You Report Non-CTEC-Registered Tax Preparers?
Most likely if you are visiting a website called RenewCTEC.com, you take your education and registration requirements seriously. Thousands of us every year pay for our 20 hour CTEC course, pay CTEC their registration fee, and then pay the IRS to renew our PTINs. In other words, thousands of us do everything that is required of us in order to do taxes for pay in the State of California.
But you know what? Many other “tax preparers” skip the mandatory education, skip the fees, and still do taxes for money.
What should the rest of us do about these interlopers? Would you report a tax preparer who was doing taxes for fees without valid CTEC registration? Or would you look the other way and “mind your own business”?
CTEC Registration Is the Law
The first thing to realize in this conversation is that unless you are an exempt preparer such as a CPA or an EA, you must complete your mandatory annual CTEC 20 hour course and you must maintain current registration with CTEC, and if you do not comply with these requirements it is illegal for you to prepare taxes in the State of CA.
California Business and Professions Code Section 22250 clearly states that all non-exempt California tax preparers must 1) Maintain a surety bond, 2) complete continuing education, and 3) register with CTEC.
Many “tax preparers” think CTEC requirements are “rules” more than they are “law.” But no, this is incorrect. It is California law.
What Can You Do About It, Anyways?
The second question, then, is whether or not you can do anything about it, if in fact you know that someone is breaking this law and doing taxes for pay without a bond, without completing mandatory continuing education, and/or without registering with CTEC.
The answer is yes, you can do something about it. CTEC offers you an easy and anonymous way to report non-compliant CTEC “tax preparers” right on their website. It takes about two seconds, you can look up the preparer, see if he or she is compliant, and then if not, report the person directly to CTEC.
CTEC takes action on these cases, too. CTEC takes compliance seriously, CTEC staff members and board members people put in a lot of work to create the system that we have and they don’t appreciate it when “tax preparers” flout the system and make the rest of us look naive for actually following the rules. CTEC has even been advertising on buses here in L.A. asking:
“Is your tax preparer legal?”
To try to encourage reporting of non-compliant preparers by the general public.
In many cases, a preparer who is non-compliant will be fined $2,500, or even $5,000 if it is a repeat offense. So there is some bite behind the bark.
Should You Report Non-CTEC-Compliant Preparer Today?
Now that we clearly know that it is the law, and that you can do something about people who break it, the question arises of whether or not you should take action.
You’re on your own to make that decision.
All we would say is that if it appears to you that the “tax preparer” is ignorant of CTEC requirements and that is the cause of the non-compliance, you may want to at least inform the person of the requirements before reporting. There are some “tax preparers” out there who don’t follow CTEC’s rules because they don’t know CTEC’s rules.
Of course, the majority of non-compliant CTEC preparers do know the rules and just don’t care to follow them.
We’d be interested to hear from our RenewCTEC.com members or the public at large:
Have you reported a non-CTEC-compliant “tax preparer”?
If not, would you do so, if you became aware that a non-compliant preparer was operating in your area?
Or do you feel that it’s none of your business what anyone else does?
We welcome your comments in the space below.
es from the CTEC / IRS Joint Conference for Education Providers