California Tax Education Council

Enforcement: Round 9

As of March 26, 2014, the Franchise Tax Board (FTB) Tax Preparer Enforcement Team has contacted 630 questionable tax preparers statewide. Of those, FTB visited 56 tax preparation offices and sent letters to 574 questionable tax preparers.

California law requires anyone who prepares tax returns for a fee and is not an attorney, certified public accountant (CPA) or enrolled agent (EA), to register as a tax preparer with the California Tax Education Council (CTEC).

Tax preparers who are caught preparing tax returns illegally are issued a $2,500 penalty letter from FTB and have 90 days to comply. If the tax preparer registers with CTEC by the deadline, the penalty is removed. If the tax preparer does not comply or complies late, the $2,500 penalty stands. In the next year, if that tax preparer still fails to comply and continues to prepare tax returns, the penalty increases to $5,000.

So far 227 unregistered tax preparers have been issued the $2,500 penalty for the 2013 enforcement year. FTB reports 37 unregistered tax preparers were also issued the $5,000 penalty.

Currently no penalties have been assessed for 2014.

If you have information regarding an unregistered tax preparer, it is never too late to let FTB know. To report a questionable tax preparer, click on Report a Tax Preparer and fill out the form.

CTEC and FTB partnered in 2005 to help better protect consumers against fraud by enforcing tax preparer compliance. CTEC pays for the entire enforcement program. All penalties collected by FTB are deposited into the state’s general fund.

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