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Certified Tax Preparer - Sciences, Education, Art, Writing, UFO - Posted: 17th Nov, 2008 - 1:57pm
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Certified Tax Preparer
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| INTRODUCTION: Most people are surprised by the fact that you do not need a license at the federal or state level to do tax preparation. You also do not need to be a lawyer, CPA or certified tax consultant. However, some type of previous training in the accounting field along with a thorough understanding of the tax laws and regulations is extremely important. Most people who start an income tax preparation business have degrees in accounting or other financial field. Because the tax code is so complex, most business owners specialize with certain types of tax preparation. For instance, many tax preparation firms work mostly with small business owners and the Schedule C. KNOWLEDGE, SKILLS AND ABILITIES You will enjoy a higher income if you become a certified tax preparer, also known as an "enrolled agent." The enrolled agent (EA) designation is the only certification granted by the federal government. You will need to pass an exam and demonstrate proficiency in handling tax returns. EA's are entitled to appear before the IRS at hearings to represent clients and may prepare tax returns for corporations, partnerships, trusts and estates. There are no academic requirements to become an EA. The exam, however is very difficult and is usually given over a two day period. You will also be required to complete seventy-two hours of continuing education courses every three years. Keep in mind, only about 30% of the applicants who take the EA exam actually pass! |
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I have some issues with this post. First of all, in most states you DO need some type of license to practice -- it certainly is true in California -- and some type of bond (insurance) against fraud or "errors and omissions" for at least $5,000 coverage.
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| The Tax Preparers Act, enacted in California in 1996, regulates a tax preparer's professional conduct, ethics, and bonding requirements. Any tax preparer, defined as "a person who, for a fee, assists with or prepares tax returns for another person or who assumes final responsibility for completed work on a return on which preliminary work has been done by another person, or who holds himself or herself out as offering those services," must register with CTEC (California Tax Education Council) unless otherwise exempt. ... The three primary requirements to complete registration with CTEC include the following: "¢ Receive at least 60 hours of tax preparer education from a CTEC approved provider, "¢ Maintain a $5,000 Tax Preparer Bond issued by a surety company admitted to do business in California, and "¢ Complete, on an annual basis, not less than 20 hours of continuing education from a CTEC approved provider. Current state law authorizes FTB (California Franchise Tax Board) to assess a penalty of up to $5,000 on tax preparers that are required to register with CTEC and have failed to do so. |
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Second, not all certified tax preparers are Enrolled Agents. That is an entirely different designation. However, they are correct in stating how difficult this exam is to receive the designation of EA.
I know this because I'm currently enrolled in an H & R Block tax preparer course, and they require each tax preparer to register with the CTEC. HRB maintains the bond.
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TOPIC: Certified Tax Preparer