What is a California Tax Preparer Bond?
In California, anyone who wishes to prepare tax returns for a fee must be registered with the California Tax Education Council (CTEC) and fully bonded in the amount of $5,000.
Who Needs a California Tax Preparer Bond?
Aside from some exceptions, anyone who prepares tax returns for a fee is required to purchase a $5,000 tax preparer bond before becoming registered with the CTEC. Exempt parties include California certified public accountants (CPAs), enrolled agents, (EAs), attorneys who are members of the State Bar of California, and some banking or trust officials.
When purchasing this bond, tax preparers have the ability to choose longer terms than most other bonds. Therefore, it’s essential for the tax preparer to be sure he or she is not already bonded, as the bond is unable to be canceled once effective.
Why Do I Need a California Tax Preparer Bond?
Tax preparer bonds protect the general public from unethical business practices. These bonds ensure that the tax preparer will adhere to all of the provisions in the Business and Professions Code (Division 8, Chapter 14). Additionally, they are prevented from intentionally or unintentionally misstating facts, misrepresenting themselves, or acting dishonestly, fraudulently, or deceitfully.
If the principal violates these laws or the terms of the surety agreement, any harmed parties can make a claim against the tax preparer bond. Once finalized, the principal is responsible for reimbursing the surety for any damages paid or associated legal costs.
How Much Does a California Tax Preparer Bond Cost?
California tax preparer bonds are required in the amount of $5,000. Due to the low risk of these surety bonds, most tax preparer bonds are available without a credit check for a low fixed rate. Coverage may be as low as $50 for a 3-year bond and $80 for a 5-year bond.
Get Started Today!
In order to prepare tax returns for a fee, you must first purchase a California tax preparer bond. Don’t delay your application.