State Warns Taxpayers to Choose Tax Preparers Wisely
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Public Affairs Office
For Immediate Release
Sacramento –Franchise Tax Board (FTB) Chair John Chiang and the California Tax Education Council (CTEC) today reminded the 64 percent of California taxpayers who use tax preparers to be cautious when choosing a professional.
“Tax professionals perform a great service for millions of people each year and play a vital role in keeping a complex tax system running smoothly,” said State Controller and FTB Chair John Chiang. “While most tax professionals are trustworthy and knowledgeable, dishonest ones can unfortunately wreak fiscal havoc on individuals by filing bad returns in the names of their clients.”
Taxpayers should avoid preparers who:
- Claim they can get bigger refunds than other tax preparers.
- Base their fee on a percentage of the refund amount.
- Refuse to sign the tax return as the paid preparer even though they are required by law to do so.
- Do not provide a copy of the tax return for the taxpayer’s records.
This is the third warning the State Controller and FTB have issued since the start of the tax filing season. They have issued alerts about other schemes that include individuals posing as Federal and State tax collectors attempting to lure taxpayers to provide personal information.
The Controller has partnered with nonprofit groups and other state offices to help people understand current scams plaguing consumers and taxpayers. He has held more than a dozen events designed specifically to help seniors protect their financial information.
His office also participates in the Voluntary Income Assistance Tax Program, which can help low-to-moderate income families claim tax credits at no cost. More information can be found at www.californiastrong.ca.gov.
CTEC is a nonprofit corporation that registers individuals who assist or prepare returns for a fee and are not licensed Certified Public Accountants, Enrolled Agents, or attorneys. CTEC was founded by the California State Legislature in 1997 to promote proficient tax preparation within the state. CTEC-registered tax preparers must complete courses on federal and state tax laws each year, plus obtain a $5,000 surety bond to protect clients against fraud. Unregistered individuals are issued a $2,500 penalty, which doubles if they continue to prepare returns. Other regulated tax preparers have their own industry requirements. The following organizations can provide more information about licensed and registered tax professionals in California:
- California Board of Accountancy dca.ca.gov/cba.
- California Society of Certified Public Accountants calcpa.org.
- State Bar of California calbar.ca.gov.
- California Society of Enrolled Agents csea.org.
The brochure FTB Publication 982, How to Select an Income Tax Return Preparer, can help people when choosing a tax professional. This publication is also available in Spanish. The IRS also has additional tips for choosing a professional tax preparer.