[February 26, 2013]

How to Know if Your Tax Preparer is Legal

If you pay someone to prepare your tax return, make sure that tax preparer is legal. California law requires anyone who prepares tax returns for a fee to be either an attorney, certified public accountant (CPA), enrolled agent (EA), or registered tax preparer with the California Tax Education Council (CTEC).

Hiring a tax preparer that cannot be verified as one of those four professionals may prevent you from having legal recourse against fraud, as well as increase your chances for additional taxes, interest and fines.

"Recommendations are definitely important, but that doesn't automatically mean they're legal. Play it safe. Verify for yourself," said Mary Beth La Munyon-Jones, chair of CTEC.

Although professional tax preparers are required to sign your tax return to show proof of work, it is still you, the taxpayer, who is ultimately responsible for all infomation listed on the tax return-no matter if it is right, wrong or even fraudulent.

"The problem is unscrupulous tax preparers only care about taking your money. They don't ask the right questions and that can get you into trouble with your taxes," said Elvira Reyes, vice president of the Hispanic Association of Professional Services.

In addition to state rules, the Internal Revenue Service is now requiring that all paid tax preparers register for a Preparer Tax Identification Number (PTIN). Tax preparers must include their PTIN on every federal tax return they prepare for clients.

"If they don't have a PTIN, walk away," said La Munyon-Jones.

To verify the legal status of…

• Attorneys, California State Bar
  Visit www.calbar.ca.gov

• Certified Public Accountants (CPAs), California Board of Accountancy
  Visit www.dca.ca.gov/cba

• CTEC Registered Tax Preparers (CRTPs), California Tax Education Council
  Visit www.ctec.org
• Enrolled Agents (EAs), IRS Office of Professional Responsibility
  Email opr@irs.gov

CTEC is a nonprofit organization that was established in 1997 by the California State Legislature to protect taxpayers against fraud and incompetent tax preparers. Visit www.ctec.org or call (877) 850-CTEC for more information.

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