Who needs Tax Preparer Bonds?
This bond is required for certain non-exempt tax preparers as part of getting licensed to prepare clients’ tax returns in California and Nevada. It generally applies to preparers who are allowed to prepare returns but are not licensed as a CPA or an Enrolled Agent. CPAs and Enrolled Agents are typically exempt because they already go through a separate licensing and oversight process.
The purpose of the bond is to protect clients if a tax preparer causes financial harm through fraud, misrepresentation, theft, or negligence. If a valid claim is paid, the tax preparer is still responsible for paying the surety back for the amount that was paid out.
How much do Tax Preparer Bonds cost?
The price you pay is the bond premium, and it depends mainly on the bond amount required by the state and the rate offered by the surety company. The rate is often influenced by your credit and financial history.
How do I get a Tax Preparer Bond?
To get the bond, you apply through a surety bond provider, and the surety company issues the bond based on the state’s requirements and the surety’s underwriting review. The bond is then used to meet the licensing requirement so you can obtain or renew your tax preparer registration or license.
Because the state sets the bond requirement and the surety sets the pricing, having your licensing paperwork ready helps ensure the bond is issued with the correct details.
Can I get a Tax Preparer Bond with bad credit?
Yes, it may still be possible. Credit can affect the rate you’re offered, especially in Nevada where a credit check is required. Having bad credit does not automatically mean you cannot get a bond, but it can mean higher pricing or additional underwriting review depending on the surety company.
How fast can I get Tax Preparer Bonds?
Timing depends on the state, the surety’s underwriting process, and whether a credit review is needed. California bonds are often faster when underwriting is straightforward, while Nevada may take longer due to the required credit check. Once your application is complete and approved by the surety, the bond can typically be issued promptly.
If you’re unsure which bond you need, BOSS Bonds can review your licensing paperwork and help identify the correct bond at no cost.
