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 make specified written disclosures to a client who is claiming the California Earned Income Tax
Credit or the federal Earned Income Tax Credit, before preparing the client’s tax return, including the total amount of all costs and fees being charged by the tax preparer. preparer and a statement that an individual with income below $66,000 may be eligible for free tax preparation services that also identifies the Internal Revenue Service’s internet websites where the client may find additional information. The bill would also require a tax prepare 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 a model disclosure form.
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 council Franchise Tax Board for a first violation and, for a 2nd or subsequent violation, a fine of $750 and discipline by the council, 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.