California Tax Education Council

FTB Pursues Questionable Tax Preparers

The Franchise Tax Board (FTB) plans to increase its visits to tax preparation offices this tax season.

FTB will focus on verifying the legal status of both tax preparers and their employees. In some cases, employees who assist tax preparers are also required to register with CTEC. 

CTEC Registered Tax Preparers (CRTPs) who failed to renew on time, but are still preparing tax returns for a fee, will also be on FTB’s watch list. 

By law, CRTPs cannot prepare tax returns for a fee if their registration is not current with CTEC. It does not matter if the CRTP has every intention to register at a later date. CRTPs who continue to do business with an expired or delinquent registration are breaking state law.

Tax preparers who are caught preparing, or assisting with preparing, tax returns for a fee without the required legal designation (CRTP, CPA, enrolled agent or attorney) will be issued a $2,500 penalty letter. They have 90 days to register with CTEC before the penalty is enforced. If they still fail to comply with the law the next year, a $5,000 penalty will be issued.

To report a questionable tax preparer, click here. All reports are investigated by FTB.

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