Who needs a Tax Preparer Bond?
The state law requires anyone who prepares tax returns for a fee and is not an exempt preparer to register as a tax preparer with the California Tax Education Council (CTEC). However there are some exempt preparers that are not required to hold a bond. These are enrolled agents (EAs), California certified public accountants (CPAs), attorneys who are members of the State Bar of California, and certain specified banking or trust officials. Visit the CTEC website to learn more.
Requirements to become a CTEC registered tax preparer.
- 60-hours of education course from a CTEC.
- Purchase a $5,000 tax preparer bond.
- Obtain a Preparer Tax Identification Number from the IRS.
- Register and submit the registration fee online.
Why do I need this bond?
According to Division 8, Chapter 14 of the Business and Professions Code the bond is held for the benefit of any person or persons damaged by any fraud, dishonesty, misstatement, misrepresentation, deceit, or any unlawful acts or omissions by the tax preparer, or the tax preparers employed or associated with it to provide tax preparation services.
Does it matter where I get my bond?
It is important to understand how surety bonds work, and who is the insurance company issuing your bonds. It is easy to run your business when you deal direct with a quality insurance company licensed in California to write surety bonds. Colonial is an A (Excellent) rated insurance company by A.M. Best, that has been incorporated since 1930. We are Treasury listed, and licensed and admitted in all U.S. states and territories.