The Internal Revenue Service’s recently issued regulations on the tax preparation industry could offer entrepreneurs protection against unscrupulous tax professionals in many states, but the requirements are nothing new for California tax preparers. Regulations and education requirements have existed for tax preparers in the state for years. Sandra Grunewald, a practicing CPA based in California, told Ventura County Star that the federal guidelines are “very positive” but she doubts they will change much for preparers and the small businesses who employ them near her.
In fact, some might say that California business owners will still be less likely to find problems with their taxes because the state-issued regulations are even more stringent than the pending federal requirements.
The biggest difference between the new federal requirements and those of the state is that the California Tax Education Council demands tax preparers have continuing education classes on federal and state tax law, while the IRS requirements just cover federal law.
Until state tax education becomes mandatory for preparers nationwide, small business owners might want to do their tax homework. Entrepreneurs should carefully consider the tax regulations that affect different business types before incorporating their businesses.