California Tax Preparer Bond Requirements
The tax preparer bond is required of any person in California wishing to become a registered tax preparer and offer this as a service, as defined by the California Business and Professions Code 22250-22259.
The CTEC requires all tax preparers– with the exception of those exempt– to become registered and obtain a bond. Those exempt, as defined in section 22258, are:
- Individuals with a valid license issued by the California Board of Accountancy
- Active members of the California State Bar
- Financial institutions regulated by the state or federal government
- Certain trust companies and businesses
- Enrolled agents that practice before the Internal Revenue Service
The purpose of the bond is to guarantee that registered tax preparers will conduct business in a faithful, honest and professional manner. The bond is necessary because tax preparers have access to other people’s sensitive personal and financial information. The bond offers legal recourse to anyone who has had their information mishandled by a tax preparer, or has been treated dishonestly.
The protection offered by the tax preparer surety bond is due to the way a surety bond functions. Like almost every other bond, this bond is an agreement between three sides: the principal (the tax preparer), the obligee (the California Tax Education Council), and the surety company that issues and backs the bond.
When a tax preparer is found to be in breach of the surety bond agreement and California state laws, the bond obligee can file a claim against the bond, and request to receive compensation for the harm done up to the full bond amount. The surety must then respond by compensating the claimant, if their claim is valid.
Once the surety has compensated the obligee, the principal (the tax preparer) must compensate the surety for its backing. For this reason, conducting business honestly and avoiding claims is always the best course of action.
Here are the bond requirements in a nutshell:
Surety Bond Name: Tax Preparer Bond
Surety Bond Amount: $5,000
California Tax Education Council
P.O. Box 2890, Sacramento,
Surety Bond Principal: Registered California tax preparers that are not exempt from the surety bond requirement
Expiration Date: Depends on the term of the bond
Consult the sections below for more information about the tax preparer bond and how to get yours.
Unlike most bonds, the tax preparer bond can be obtained without a credit check. The bond amount is $5,000, but the cost of getting your bond starts at $100, and the bond can be issued for a term of up to 5 years. Approvals for these bonds are fairly fast so you can expect to have your bond in a very short amount of time.
By working with Bryant Surety Bonds you are sure to receive bonds by some of the best companies in the country. All the surety companies we work with are A-rated and T-listed which makes them highly trusted and reliable.
Ready to get your bond? Just fill in the online application form and leave the rest to us. If you have any questions, just call us at 866.450.3412 to consult our bonding professionals.
Bad Credit Bonds
If you have a bad credit score, you can still get a tax preparer surety bond, don’t worry. Our Bad Credit Program is designed to service those clients that have low or nonexistent credit but want to get bonded and do business. Rates under this program may be higher but the exact cost of a bond is determined on a case-by-case basis.
Regardless of your credit score, whether it’s good or bad, all surety bonds are provided by the same professional companies, and our clients always get the lowest possible rates on their bonds.
Tax Preparer License: Application and Renewal
To get your tax preparer license from the CTEC you need to cover a number of requirements which include:
- Obtaining a $5,000 surety bond
- Passing a 60-hour education course
- Obtaining a PTIN number from the Internal Revenue Service
- Paying a registration fee in the amount of $33
The deadline to renew your tax preparer registration is October 31st of each year. Renewal includes passing a continuing education course, renewing your PTIN number and surety bond (if its term is running out), as well as paying the $33 registration fee (or $55 if renewing after October 31).
How to Get Your Tax Preparer Bond
Apply online here to get your tax preparer bond. Processing and approval times for these bonds are short, and we will soon contact you with your quote.
You can reach us at 866.450.3412 to speak to our surety professionals and receive more information or assistance, if needed. We will be happy to help!