California Tax Education Council
CTEC vs. IRS Registration Questions
Friday, October 1, 2010 - 12 commentsCTEC attended the Las Vegas and San Diego IRS Tax Forums this year and, as expected, there were a lot of questions from CRTPs regarding how the new IRS registration mandate will impact CTEC requirements. There still seems to be some confusion on who is exempt and the fate of CTEC. Below are the most frequently asked questions from CRTPs.
What happens to CTEC once the IRS mandate takes effect?
Nothing. CTEC registration and FTB enforcement will remain intact for California. At this point, there are no plans to change CTEC requirements other than to try and conform its federal continuing education hours to the IRS’. Any additions or revisions made to CTEC will require legislative change to the California Business and Profession Code.
Why can’t CTEC convince the IRS to “grandfather” in CRTPs?
CTEC and the IRS have been in close contact to discuss tax preparer registration; however, the IRS is still the architect of the federal program. CTEC is not a membership organization so it does not have the authority to “lobby” for CRTPs. CTEC is only responsible for complying with decisions made by government.
Why doesn’t CTEC dissolve so CRTPs are not forced to pay IRS and CTEC fees?
The California State Legislature, not CTEC, makes that decision and still believes it important for tax preparers who are not attorneys, certified public accountants or enrolled agents to be bonded, know state tax laws and complete qualifying education requirements. The new IRS regulations do not include any of those requirements.
Why are CTEC requirements not enough to exempt CRTPs from the IRS continuing education and exam requirements?
In the eyes of the IRS, unless the tax preparer is an attorney, certified public accountant or enrolled agent, it does not matter what accreditations or state requirements other tax preparers have completed. Basically the IRS would like to keep those tax preparers under one umbrella.
What changes will CTEC make once the IRS mandate takes effect?
The IRS is moving fast and a lot of the details have not yet been announced. Until further notice, nothing has changed on CTEC’s end. All CRTPs must still complete continuing education requirements (12 hours federal, 4 hours state, 2 hours ethics, 2 hours federal and/or state) and renew their registration no later than October 31, 2010.
Why should I keep my CTEC registration once the IRS mandate takes effect?
CTEC registration is still a state law requirement for tax preparers who are not attorneys, certified public accountants or enrolled agents. Tax preparers who are caught preparing federal and state tax returns for a fee (yes, California law stipulates federal tax returns) without a legal designation will face penalties from FTB.
If a CRTP only plans to prepare state tax returns, then IRS registration is not needed.
When can I start taking IRS continuing education?
Any continuing education taken in 2010 will not count toward the new IRS requirement. As of October 4, 2010, the IRS has not confirmed an exact date for when tax preparers can start completing the 15 hours of federal continuing education.
When can I register/renew for a PTIN? And how?
Registration to get a PTIN is now open. Visit www.irs.gov and click on the Tax Professionals tab.
For more information, the IRS has set up a PTIN telephone line. Call toll-free (877) 613-7846. Tax preparers can also register for a PTIN by mail. Fill out form W-12 (IRS Paid Preparer Tax Identification Number Application). Please allow four to six weeks for a response.
When will I have to pass the IRS exam?
Tax preparers who register/renew their PTIN before the testing centers are operational (expected to happen by the summer of 2011) will have three years from the date of initial registration to pass the exam. The exam will be open book and can be taken as many times as needed within the three-year timeframe. No software will be provided.
Tax preparers who fail to register/renew for a PTIN before the testing centers are open will not be allowed to register for a PTIN until they pass the IRS exam.
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Comments
I get it now. You board is made up of CPA and EA's. What we are saying is that the IRS has duplicated your system and the CTEC did not have enought *** to say our system is fine and to exempt our members. Instead the IRS is calling your system a shame and you all are blowing it off by saying that you agree with them and your members are crooks. In addition we will still charge our members .. Do you have no shame !!!!! Get off the fence. IRS thinks you are a joke or they would have given California some consession. NO!!! they gave CPA and EA's the whole hotdog. They even exempted there employees because of the impact on there business. CTEC wake up !! No I will not renew with CTEC. Sue me. You are useless.
First, we understand the frustration, but please keep your comments civil so we are not forced to “star” out certain words. CTEC does not normally respond to comments that include inappropriate language, but there are a few misconceptions you brought up that we would like to address. CTEC is not a membership organization so we do not have the authority to fight for IRS exemptions. That is an issue to take up with the State Legislature or IRS—not CTEC. Oregon also has strict rules for its tax preparers and they asked for exemption and lost. Again, it goes back to the IRS will do what it sees fit. As for your comment about CTEC board members, we actually have more CRTPs sitting on the board than we do EAs or CPAs. Also, the IRS did not exempt employees for CPAs, EAs or attorneys who assist them with preparing federal tax returns. They are required to get a PTIN from the IRS, and if they sign the return, they must also pass the exam and complete continuing education courses. Finally, please remember CTEC is purely a monitoring system to implement the requirements already set by law. CTEC is the messenger, not the decision maker when it comes to IRS and state mandates. If you want action taken on this issue, you need to contact the State Legislature or become a member of a tax preparer association. If you want to boycott CTEC, that is your choice. But if you continue to prepare tax returns for a fee, all you are doing is allowing yourself to get penalized by the Franchise Tax Board. Our registration fee is $25 a year. Is it really worth avoiding it to get a $2,500-$5,000 penalty?
Did the CTEC do its job. Of course not. The IRS E-file system is the problem. The IRS is telling you that Californina Preparers are bad. I have been a member of CTEC for over 15 years and now I see it was a waste of time and money. The CTEC should be ashamed of yourselve to have sold out so many great people. I will not renew with the CTEC and will encorage others to boycott the CTEC and force you to stand by us or we will not prepare califronia returns at all. The internet is a powerful tool these days. Shameful !!!!!
Please remember that the IRS and CTEC are two completely different entities. What IRS does or whatever issues you have with the IRS has absolutely nothing to do with CTEC. Boycotting CTEC registration will only make you vulnerable to penalties from FTB. CTEC is not a membership organization for CRTPs. CTEC only monitors and implements the laws that are already in place. For years most of CTEC's focus has been to put as much money as possible toward promoting legal tax preparers (including CRTPs) to the public through advertising and enforcement. We have said it before and we will keep saying it again: If you have an issue regarding CTEC policy or would like to know more about how CTEC operates, our meetings are open to the public. CTEC always strives to remain as transparent as possible to the public and CRTPs. If are interested in attending, call our office 877-850-2832.
I applaud CTEC for taking the necessary measures to make sure people are compliant with tax preparation educational requirements. I agree with the IRS decision regarding oversight of all tax preparers. What took so long? This isn't the only profession you have to be certified at the state and national level to do business. People have to remember that there are different rules in every state and the IRS may have a different view on certain guidelines. Oh, and let me clear something up...if you are preparing taxes under a CPA or EA, you still need to be registered under CTEC in California.
WOULD YOU KINDLY PROVIDE US TAX PREPAERS WITH THE E MAIL ADDRESSES, FAX NUMBERS ANY CONTACT NAMES ADDRESSES OR PHONE NUMBERS TO THE CALIFORNIA STATE LEGISLATURE AS WELL AS THE NANY STATE AND NATIONAL ASSOCIATIONS TO CONTACT SO THEY MAY BE ABLE TO HELP US. IF CTEC CANNOT HELP US AT LEAST GIVE US THIS INFORMATION. AFTER ALL CTEC MUST REMEMBER WITH SO MANY TAX PREPARERS UNABLE TO AFFORD TO OBTAIN WORK WITH ALL THE NEW FEES THERE WILL BE A DRASTIC DROP IN CTEC REGISTRATION. THERE REALLY WILL NOT BE A NEED FOR CTEC WILL HAVE THE PRECEDENCE MORE PEOPLE WILL WORK UNDER CPA'S AND EA'S, ATTORNEYS AND ALL THOSE EXEMPT FROM CTEC
Yes, CTEC does expect there to be a drop in the number of registrants due to the additional fees required by the IRS. CTEC does not have a full contact list of national and state associations. If you would like to reach the State Legislature, CTEC is governed under California Business and Professions. Please understand that the focus of CTEC is not to profit from tax preparer registration fees. If the majority of CRTPs decide to get out of the tax preparation business and do something else, then so be it. Again, our main concern is to ensure paid nonexempt tax preparers are in compliance with the law and that consumers understand the requirements in place.
IT IS STATED CTEC IS NOT A MEMBERSHIP ORGANIZATION, BUT WE PAY TO BE CERTIFIED OR REGISTERED EACH YEAR. WHAT IS THAT FOR, THE ILLEGAL PREPARERS ARE NOT WITH CTEC. WHY CANNOT CTEC PUT ALL OF THE TAX PREPARERS TOGETHER WITH A COMPLAINT LIST GOING TO CONGRESS AND TO IRS TO STOP THE EXTORTION AND LEAVING US WIDE OPEN FOR IDENTITY THEFT, USING A THIRD PARTY VENDOR FOR THIS PTIN WHICH WE INITIALLY OBTAINED SO TO PROTECT OUR SOCIAL SEC NUMBER FROM BEING PUT ON THE TAX RETURN TO PROTECT US. I HAD A CLIENT WHO HAD TO DEAL WITH THE IRS ABOUT A REFUND ONE OF THE IRS REPS ASKED FOR THE E MAIL ADDRESS PERSON GOT AN E MAIL A WEEK OR SO LATER SAYING THE MATTER HAD BEEN RESOLVED AND THE AMOUNT THAT WAS TO BE REFUNDED, WHICH WAS MUCH LESS AND THEY WERE TO PUT THEIR BANK ACCOUNT NUMBER AND SEND THE EMAIL BACK IMMEDIATELY. I TOLD THE PERSON TO CALL THE IRS INNEDIATELY AND SEE WHAT WAS GOING ON BEFORE SENDING THE EMAIL WITH BANK ACCOUNT NUMBER, THEY CALLED IRS AND WAS TOLD THAT IT WAS A FAKE EMAIL PHISHING SCAM AND TURNED IT OVER TO IRS FRAUD DIVISION. WE NOT ONLY HAVE TO BE CAREFUL OF PEOPLE AT IRS BUT WHO IS WATCHING OVER OR POLICUBG THIS THIRD PARTY WITH ALL OF OUR INFORMATION FOR PTIN. WE ALSO HAVE TO PAY FOR BONDING, EDUCATION, CTEC NOW PTIN AND IRS TESTING IN ADDITION THEY WANT US TO GO SOMEWHERE AND TAKE THE TEST. AVERAGE TAXPREPARER IN CALIFORNIA IN MY AREA WAS PAID 8 TO 8 DOLLARS AN HOUR. WE ONLY WORK A FEW MONTHS OUT OF THE YEAR. WHERE ARE WE TO GET ALL OF THIS MONEY FROM. THERE ARE SO MANY PEOPLE OUT OF WORK IN CALIF THIS IS PUTTING EVEN MORE OUT OF WORK. DO NOT FORGET THE POOR AVERAGE TAXPAYER WHO WILL GET RIPPED OFF AND PAY HUGE AMOUNTS OF MONEY JUST TO GET THEIR TAXES DONE, SOME WITH REFUNDS AND OTHERS WITH NO REFUND. IF CTEC CANNOT HELP THEN CAN CTEC REFER US TO AN ORGANIZATION WHO CAN. WE NEED TO PUT A CLASS ACTION LAWSUIT AGAINST THE IRS FOR EVEN THINKING UP THIS IDEA OF EXTORTION OF THE AMERICAN PEOPLE.
The California State Legislature governs CTEC. We can only do whatever the state wants us to do. Our responsibility is to register nonexempt tax preparers. Our focus is to protect taxpayers by ensuring nonexempt tax preparers have met the minimum standards set by the State Legislature. That is primarily it. Any issues or changes pertaining to CTEC must be taken up with the State Legislature, not CTEC. There are many state and national tax preparer assocations you can join that can help with your request.
How do the Tax Preparer get on the "Available for work" list of the potential Firms?
Sorry, CTEC is not a membership organization so it cannot provide that kind of information or services for you. CTEC merely oversees the registration of tax preparers. Try researching tax preparer associations online to see if they can help you.