California Tax Education Council
Licensed, Certified or Registered?
Wednesday, June 1, 2011 - 7 commentsFor years there has been a wide misconception of the difference between tax preparers who are licensed, certified and registered.
The misuse of those three terms is definitely not limited to CTEC-registered tax preparers (CRTPs). It is an ongoing issue with many consumers, government agencies, the media and the list goes on and on.
So let’s try to straighten this out once and for all.
Simply put, CRTPs are registered. CRTPs are not licensed, certified, enrolled or public. Having a CTEC registration basically means that the tax preparer has met the state’s minimum requirements to prepare tax returns for a fee.
To be clear, CTEC did not create the requirements. The California State Legislature did.
Unlike the IRS, State Bar and California Board of Accountancy, which license or certify its group, CTEC was not given that kind of authority from the State Legislature. To do things like certify and license, some type of enforcement power is required.
Ever wondered why CTEC partnered with the Franchise Tax Board to enforce tax preparer compliance? It is because the State Legislature did not give CTEC any type of enforcement authority other than to manage the registration of nonexempt tax preparers.
So what significance does the CRTP designation hold? Actually, quite a bit …
- The California State Legislature established CRTP requirements to help protect California taxpayers against fraud.
- CRTPs are the only tax preparers required by law to complete a set amount of education on California tax laws each year.
- CRTPs are the only tax preparers required by law to obtain a surety bond to protect clients against fraud.
- At more than 44,000 and counting…. CRTPs are the largest group of professional tax preparers in California.
When it comes to battling misconceptions, accuracy and consistency are the best-known cures. Even properly using simple terms like “registration” can make a difference.
Comments
"Unlike the IRS, State Bar and California Board of Accountancy, which license or certify its group, CTEC was not given that kind of authority from the State Legislature. To do things like certify and license, some type of enforcement power is required." How does the passage of SB-484 play into this Blog post now? It seems to me that now CTEC has legislative authority.
You ask a good question, Tino. The bill did not specify any changes for allowing CTEC to license or certify tax preparers. It may be something that could be addressed during CTEC's Sunset Review before the State Legislature.
Has there been a determination whether the CTEC education and examination will satisfy the new IRS preparers requirements?
You ask excellent questions. The new IRS regulations will not change your CRTP designation or use of the CTEC logo. Basically you will have two designations: One for CTEC and one for IRS. As for you second question…. There is legislation in right now to conform CTEC’s federal continuing education requirements to the IRS’ so you won’t have to complete “double” federal education requirements. The proposed new hours would be 15 hours federal (the same as IRS’) and 5 hours state. If the legislation passes, the new CTEC hours should take effect January 2012. As for the exam question, from what CTEC has been told, you will be required to pass the upcoming IRS exam.
I received an IRS Guidewire yesterday that included Notic 2011-45 regarding PTIN registration. The notice states "Because the conditions for becoming a registered tax return preparer are not yet able to be satisfied by any individual, no individual may represent that he is a registered tax return preparer. As a CTEC registered preparer with many years of PTIN registration, how does this affect my use of the CTEC logo and the designation of CRTP in my business name?