Tax Preparer

Tax Preparer

Tax preparer bonds help ensure that tax preparers comply with California Tax Education Council (CTEC) standards.

A $5,000 surety bond is required before conducting business as a tax preparer in California. Bond policies range from one to five years, and longer terms can have lower annual rates.

Tax preparer bonds are legally-binding contracts between three parties:

  • The obligee—is the government agency requiring the tax preparer bond
  • The principal—the tax preparer purchasing the bond
  • The surety—the underwriter providing the tax preparer bond

Tax preparers must have a bond before registering with the CTEC, and they are required to provide CTEC with the bonding company’s name, bond number, and the bond’s validity period.

A surety bond is not an insurance policy. If the tax preparer does not meet their contractual obligations, a claim may be filed against the bond. The tax preparer is liable for their own contractual obligations and must repay the surety bond for any damages incurred.

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