Existing law, the Tax Preparation Act, requires a tax preparer to register with the California Tax Education Council and, among other things, requires a tax preparer to provide specified written disclosures to a client in connection with tax preparation services, including written disclosures relating to refund anticipation loans. A violation of the provisions of the act is a misdemeanor, except as specified.
This bill would require a tax preparer to provide a client with a specified written disclosure before preparing the client's tax return that includes the costs and fees charged by the tax preparer for usual and customary tax preparation services and a statement relating to the availability of free tax preparation services for individuals with incomes below specified amounts that identifies the Franchise Tax Board's and Internal Revenue Service's internet websites where the client may find additional information. The bill would require a tax preparer to provide a client with an additional written disclosure after preparing the tax return that includes the total cost the client is being charged by the tax preparer and the contact information of each tax preparer who worked on the tax return. The bill would also require a tax preparer to make the written disclosures available in English, Spanish, Chinese, Tagalog, Vietnamese, and Korean. The bill would require the Franchise Tax Board to develop and post on its internet website model disclosure forms.
This bill would exempt violation of these provisions from the existing criminal sanctions, and would instead make a violation of the provisions subject to a warning by the Franchise Tax Board for a first violation and, for a 2nd or subsequent violation, a fine of $750 and discipline by the Franchise Tax Board, as specified. The bill would require the Franchise Tax Board to notify the council about a violation of these provisions. The bill would require the penalty money collected pursuant to those provisions to be used, upon appropriation by the Legislature, for the federal Volunteer Income Tax Assistance program and Earned Income Tax Credit outreach efforts.