Tax Preparer Registration

[jainen]

For more than a decade California has required independent tax preparers (other than EAs, CPAs, and attorneys) to register and take continuing education. A new law extends this to employees of regular tax offices unless an EA, CPA or attorney personally signs the return. The new rules regarding registration apply to anyone who enters tax data, even if they are only an assistant who does not sign the return.

[kcjenkins]

I don't mean to be 'picky', Jainen, but your post is confusing to me. You first say it extends it to them "unless an EA, CPA or attorney personally signs the return", but then you say it applies to "anyone who enters tax data, even if they are only an assistant who does not sign the return". So which is it?

[jainen]

>>So which is it?<<

Both. An employee is exempt ONLY if they work for an EA, CPA or attorney who signs the return. If they work for someone who is not an EA, CPA, or attorney, or in an office where others sign the return, the data entry clerks must also be registered even though they themselves are not signing the returns.

[JRS]

Below is from CTEC in the August newsletter:

Effective July 1, 2008, California Senate Bill 797, passed by the California State Legislature and

signed by the Governor, clarifies the definition of who is and is not exempt from CTEC registration

The original rationale to allow employee exemption was based on the assumption that the CPA,

EA or attorney would review the employees’ work and sign the return. Unfortunately recent

visits to tax preparation offices have shown this is not always the case and many exempt

employees are preparing and signing returns without any supervision.

As a result, the newly revised law requires that all CPAs, EAs and attorneys must sign the returns

prepared by their exempt employees so they are fully held accountable for the employees’ work.

If they prefer not to sign the return prepared by the employee, then the employee must register

with CTEC so he or she can legally sign the return.

In addition to clarifying employee exemptions, the revised law also expanded the definition

of “tax preparation” to include data entry. Individuals who input tax-related data into a

computer must now register as a CRTP.

If you read California Business and Professions Code 22251, it defines a “tax preparer” as those

“who prepare the return” or “assist with” preparing the return. Since inputting tax data is assisting

with preparing the return, for accuracy purposes, the law was revised to include data entry.

It is not jainen who is confusing!!!

[zeke]

>>In addition to clarifying employee exemptions, the revised law also expanded the definition of “tax preparation” to include data entry. Individuals who input tax-related data into a computer must now register as a CRTP.<<

"expanded" is an understatement. Data entry into a computer can include just about anyone who can turn the computer on!

zeke

[bstaxes]

Does this apply to preparers from other states who file Ca returns? Do I need to get register with Ca?

[jainen]

>>Do I need to get register with Ca?<<

I don't know. There is no way to enforce it except to refuse the returns. A couple of years ago there was a big fuss when they tried to say out of state preparers were conducting business within California. Accountants fought it and the state backed down, at least regarding CPA's properly licensed in their own state and doing only a few California returns.

[windmill]

>>Do I need to get register with Ca?<<

I don't know. There is no way to enforce it except to refuse the returns. A couple of years ago there was a big fuss when they tried to say out of state preparers were conducting business within California. Accountants fought it and the state backed down, at least regarding CPA's properly licensed in their own state and doing only a few California returns.

Who is required to comply with the Tax Preparers Act?

Any person who for a fee, assists with or prepares a State or Federal tax return, or assumes responsibility for such a return, or who offers these services.

From the CTEC web site,,,,it seems to me that if I prepare a CA return then I must be registered. How when they start getting a lot of CA returns prepared by out of state preparers,,,they might change their minds...as before.

[kcjenkins]

If you are not in CA, and do 5 or less, you don't have to.