California Tax Education Council

CTEC

 

The 2008 law states "tax preparation" includes data entry.

Individuals who input tax-related data into a computer
must now register with CTEC.

 

A “tax preparer” is defined to be a person “who prepares the return” or “assists with” preparing the return.

The new 2008 law defines “tax preparation” to include data entry. CTEC and FTB have announced “Individuals who input tax-related data into a computer must now register with CTEC”.

To register with CTEC a “Tax Preparer” must have the basic 60 hours of tax education, 20 hours of continuing education and a surety bond. (Senate Bill No. 797, Section 22258 of the Business and Professions Code, Effective July 1, 2008.)

IMPORTANT UPDATE (9/19/08)

FTB has the duty to enforce the CTEC laws. David Hill, FTB Tax Preparer Enforcement, has advised me that the new law regarding requiring “individuals who input tax related data into a computer” applies to persons who interface with taxpayers to obtain the tax data directly from the taxpayer and then enters the data received into a computer. This individual is considered a “tax preparer” and must register with CTEC.

Conclusion – A tax data input employee of a CTEC registered preparer who does not obtain the tax data from the taxpayer is not required to register with CTEC.

Example #1: Cathy is registered with CTEC. Cathy hires Dan to input tax data into a computer. Dan meets with Cathy’s clients (taxpayers). Dan interviews the clients to obtain their tax data.  Dan inputs the client’s tax data into a computer.
Conclusion: Dan is perceived to be a “tax preparer” and must register with CTEC.

Example #2 –Cathy meets with her clients (taxpayers). Cathy interviews the clients to obtain their tax data. Cathy enters the client’s tax data on to data input sheets. Cathy gives the completed data input sheets to Dan. Dan inputs the data on the input sheets into a computer. Cathy signs the completed tax return as a paid preparer.
Conclusion: Dan is not a “tax preparer” and is not required to register with CTEC.

FTB & CTEC are planning to post more information regarding this subject to their web sites at www.ftb.ca.gov and www.ctec.org 

Submitted by Larry L. McClellan