Tax Season: Disciplinary Actions Against CTEC Registered Tax Preparers

"We cannot say this enough. Verify, verify, verify. Don't ever assume," said Susie DiMaggio, chair of the California Tax Education Council (CTEC), a state-mandated nonprofit organization that manages the registration of unlicensed tax preparers.

California Assembly Bill 3143 aims to increase the protection of taxpayers by allowing CTEC to post on its website all disciplinary actions taken against a registered tax preparer by the council, including misconduct that results in suspending or revoking a registration. CTEC is also required to post a list of its registrants on probation that specifies the reason why and the terms.

In addition to posting disciplinary actions, the new law requires registrants to report all paid claims against their surety bond to CTEC. CTEC will post a listing of those claims on its website.

California law requires paid tax preparers to be either an attorney, certified public accountant (CPA), enrolled agent (EA)or CTEC-registered tax preparer (CRTP). Of the 80,000 tax preparers estimated to be doing business in California, 40,000 are registered with CTEC.

To obtain a CTEC registration, CRTPs must pass a 60-hour qualifying tax education course, purchase a $5,000 surety bond to protect taxpayers against fraud, plus obtain a Preparer Tax Identification Number (PTIN) from the Internal Revenue Service. After their initial registration, CRTPs are required to maintain their bond and PTIN, plus complete 20 hours of continuing education each year before they can renew with CTEC.

"The goal is to provide more transparency to taxpayers and hopefully stop costly mistakes from being made," said Celeste Heritage, CTEC Administrator.

As of July 1, 2019, all disciplinary actions against CRTPs are posted online. Taxpayers who need to verify the status of an attorney, CPA or EA, must contact their oversight agencies. CTEC is a nonprofit organization established in 1997 by the California State Legislature to protect taxpayers against fraud and incompetent tax preparers.