California Board of Accountancy Supports Legislation Requiring Tax Preparers to Provide Written Disclosures to Consumers


By Thomas Burke

AB 1140 (Stone), as amended January 23, 2020, is a two-year bill, originally introduced February 21, 2019, that would add section 22252.2 to the Business and Professions Code to require tax preparers to provide consumers with written disclosures regarding the costs and fees the tax preparer charges, as well as the free tax preparation services available to clients with an annual income of less than $66,000. Additionally, the bill would require the written disclosures provided to consumers to be in English, Chinese, Spanish, Tagalog, Vietnamese, and Korean. Finally, the bill would require the Franchise Tax Board (FTB) to develop a model disclosure form and make it available on its website.

According to the bill’s sponsor, Prosperity Now, the bill seeks to better inform and protect low-income taxpayers, in particular those who may qualify for the Earned Income Tax Credit (EITC), about the costs and availability of tax preparation services in California. Specifically, the sponsor states that the bill will ensure that low-income taxpayers will “receive the full benefits of both the California and Federal EITCs and their tax refunds without risk of having this much-needed source of financial assistance eroded by high-cost of predatory paid tax preparation services.”

Although it does not regulate tax preparers, the California Board of Accountancy voted to support the bill on March 21, 2019. In a letter to the author on April 10, 2019, the Board stated the bill “is in line with our consumer protection mandate.”  The California Society of Tax Consultants, opponents to the bill, argue the bill “fails to acknowledge regulations currently in place to regulate tax professionals in California. Additionally, [this bill] displays a lack of awareness of both the tax preparation process as well as the application of tax law, specifically with respect to the California Earned Income Credit.”

At this writing, the bill is pending in the Senate Rules Committee, awaiting assignment to a policy committee.


One thought on “California Board of Accountancy Supports Legislation Requiring Tax Preparers to Provide Written Disclosures to Consumers

Leave a Reply

Your email address will not be published. Required fields are marked *


This site uses Akismet to reduce spam. Learn how your comment data is processed.