California Tax Education Council
Q & A
We are happy to provide the most common questions and answers we receive about the Tax Preparers Act (California Business and Professions Code, Chapter 14, §22250-22259). This is not a complete legal description or guide to all requirements.
-
What if I live outside of California, can I prepare California tax returns?
-
What do I do to become a registered Tax Preparer in California?
-
How will I know a tax class meets the "qualifying education" requirements?
-
Does the statute allow CTEC to approve work experience in lieu of qualifying education?
-
Do I have to pay a separate application fee for multiple business locations?
-
How can I file a complaint about a CTEC registered or exempt (EA, CPA, Attorney) tax preparer?
Q & A - Who is required to comply with the Tax Preparers Act?
Any person who for a fee, assists with or prepares a State or Federal tax return, or assumes responsibility for such a return, or who offers these services.
Q & A - Who is exempt from the Tax Preparers Act?
Generally speaking, CPAs, Attorneys, Enrolled Agents and anyone employed by these individuals are exempt from the Act. (For a full description of all requirements to be exempt see Section 22258).
Q & A - What if I live outside of California, can I prepare California tax returns?
Yes. The law is limited to overseeing tax preparers who are preparing state and federal tax returns for a fee within the State of California. Out-of-state tax preparers are not obligated to meet California requirements.
Q & A - What do I do to become a registered Tax Preparer in California?
Find a CTEC approved curriculum provider, successfully complete a 60-hour (45 hours Federal and 15 hours State) course approved for qualifying education, obtain a PTIN (Preparer Tax Identification Number) from the IRS, purchase a $5,000 tax preparer bond from your insurance/surety agent, and apply to obtain a certificate of completion from CTEC.
Q & A - How can I locate an approved provider?
You can search for a CTEC Approved Education Provider by going to the Approved Education Providers link or write or call CTEC and request a List of Approved Education Providers.
Q & A - How will I know a tax class meets the "qualifying education" requirements?
A "qualifying education" tax course meets requirements when not less than 60 hours of instruction is taught in basic personal income tax law, theory, and practice by an approved curriculum provider. Of the required 60 hours, 45 hours shall be concerned with federal tax curriculum and 15 hours shall be concerned with state tax curriculum.
All approved courses by CTEC have an assigned three part course number that includes a QE (9999-QE-9999) These numbers are available from the provider and are found on the course completion certificate that is issued from the school to students who successfully complete the course.
Q & A - How do I obtain a certificate of completion from CTEC?
Within 18 months of completing a qualifying education course, obtain a $5,000 Tax Preparer bond from a insurance/surety company, and register at www.ctec.org - Preparer Registration and Personal Account (qualifying education must be electronically submitted by the provider before you can register online). You will receive your Certificate of Completion within 4 to 6 weeks.
Q & A - How do I obtain a tax preparer bond?
A surety bond is offered by many insurance and surety companies in California. A business insurance agent or advisor can recommend a specific carrier or look in the yellow pages under bonds. You must submit proof that you are at least 18 years old.
Q & A - When does the time period for continuing education start?
Once you are registered, you must complete 20 hours (10 hours of federal tax law topics, 3 hours of tax law updates, 2 hours of ethics and 5 hours of state) of continuing education by the upcoming October 31st.
Q & A - When can I legally prepare taxes?
You may begin preparing tax returns after you complete the required education, obtain your bond and are registered with CTEC.
Q & A - What is the continuing education requirement?
20 hours of CTEC approved continuing education (10 hours of federal tax law topics, 3 hours of tax law updates, 2 hours of ethics and 5 hours of state). This education must be taken from a CTEC approved curriculum provider and completed by October 31 of each year.
All approved courses by CTEC have an assigned three part course number that includes a CE (9999-CE-9999) These numbers are available from the provider and are found on the course completion certificate that is issued from the school to students who successfully complete the course.
Q & A - When and how do I report my continuing education?
Once you complete the required education, CTEC Approved Providers are required to electronically submit your hours to CTEC.
All approved courses by CTEC have an assigned three part course number that includes a CE (9999-CE-9999) These numbers are available from the provider and are found on the course completion certificate that is issued from the school to students who successfully complete the course.
Q & A - What happens if I don't complete my continuing education and apply for a statement of compliance by October 31st?
Your status will be changed to expired until you complete the required education and complete the renewal application. You will also need to pay a $88.00 fee, ($33.00 registration fee and $55.00 late fee). Your status will remain expired until your application is processed by CTEC.
Your bond may be canceled by your insurance/surety company and a tax preparer may not conduct business without a current surety bond.
Starting November 1, 2012, CRTPs who do not renew their registration by January 15, 2013, and each year thereafter, will have to re-take the 60-hour qualifying education course by an approved education provider and register as a new tax preparer with CTEC. The new policy will shorten the grace period from 12 months to 10 weeks.
Q & A - Does the statute allow CTEC to approve work experience in lieu of qualifying education?
CTEC is authorized to consider "a minimum of two recent years experience in the preparation of personal income tax returns" to determine if an individual has achieved "the equivalent of the required qualifying education". Those who prepared taxes in violation of the statute may not use such time to qualify for this exception. Call CTEC to receive an Experience In Lieu of Education Application.
The above paragraph means that anyone who has had a CPA, EA, or Attorney License for the last two years; anyone who was employed by one of those three for the last two years; or anyone moving to CA from out of state with 2 years experience, may apply to receive an exemption from having to take the full 60-hr qualifying course.
You may only use this application (which you can download from www.ctec.org under Applications) if you fit into one of the above three categories. Please do not try to use this application for any other use.
Q & A - Does the statute allow CTEC to approve courses offered by schools that are not approved curriculum providers?
No. The Council has no authority to certify any education that is not provided by a curriculum provider approved in advance by CTEC. Schools that want to offer courses that qualify for the Tax Preparers Act should apply to CTEC to become an approved curriculum provider.
Q & A - Do I have to pay a separate application fee for multiple business locations?
No. You need only pay one fee for each preparer.
Q & A - I've always been subject to the regulations and registered by CTEC, but my bond has been through my employer. I'm going out on my own now. Do I have to start all over again and take the qualifying education?
No, you do not need to start all over, but until you obtain a valid bond to cover your new practice, you may not prepare taxes. You will be eligible to renew your registration and obtain a Statement of Compliance when you meet the continuing education requirements and provide proof that you have maintained a valid bond.
Q & A - How do I find out more about what I must do to comply with the requirements of the Tax Preparer Act (Business and Professions Code Sections 22250-22259)?
Copies of The Tax Preparer Act and a "General Information for Tax Preparers" are available from CTEC.
Q & A - What is the California Tax Education Council?
The responsibility for approving tax schools was transferred by the Legislature and the Governor to the California Tax Education Council effective July 1, 1997. The Council is a private industry association made up of appointees from non-profit tax preparer associations and for profit corporations. Representatives to the Council are appointed as described in Section 22251. In addition to approving providers of tax education, the Council is charged with providing a list of approved curriculum providers, verifying the required tax education and insuring that preparers provide valid bond information before issuing a statement of completion/compliance to the preparer.
Q & A - How can I file a complaint about a CTEC registered or exempt (EA, CPA, Attorney) tax preparer?
CPA's - Board of Accountancy
Attorneys - California State Bar
EA's - IRS
FTB - ftb.ca.gov (search tax fraud)
800-540-3453
916-843-2060 fax
IRS - Form 14157 & 14157A
800-829-0433
Q & A - I have other questions.
Please contact the California Tax Education Council with any questions you could not get answered through this website at info@ctec.org.