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Look Out for Illegal Tax Preparers

With tax season underway, the California Tax Education Council (CTEC) and the Franchise Tax Board (FTB) are partnering up for a second year to catch illegal tax preparers. Thanks to recently passed legislation, the FTB was given authority to crack down on the estimated 10,000 people illegally preparing tax returns in California.

'Illegal tax preparers can create devastating situations for consumers,? said CTEC Chairman Bill Geideman. ?Sometimes their work will trigger an audit and the outcome is often not in favor of the consumer.?

If preparers not registered with CTEC are caught charging a fee to prepare tax returns, the FTB will issue a $2,500 penalty. If they continue to prepare returns without registering, the FTB will issue an additional penalty of $5,000.

?We don?t want honest taxpayers to pay the price for dishonest tax preparers,? said State Controller and FTB Chair John Chiang. ?Taxpayers need to protect themselves and make sure they choose their registered tax preparer with care.? Last year the FTB visited more than 750 tax preparation offices and issued nearly 100 penalties. Almost 75 percent of the preparers complied with CTEC within the 90 day deadline. For 2007, the FTB is working with an extensive network of agency contacts to catch illegal tax preparers.

CTEC is a nonprofit organization that was established in 1997 by the California State Legislature to protect the public and promote competent tax preparation. Three kinds of tax preparers are exempt from registering with CTEC: Certified Public Accountants, Enrolled Agents and attorneys licensed in California.

For more information about CTEC, call (877) 850-2832 or visit us online at To learn more about the Franchise Tax Board, visit


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