Who Must Register as a Tax Preparer in SC?

All paid tax preparers must register with the South Carolina Department of Revenue. This includes individuals and businesses that prepare taxes. This consists of all types of taxes, including income, sales, and property.

How to Register As a Tax Preparer in SC

Tax preparers must register annually with the SC Department of Revenue (DOR). They can do this online here. To register, preparers will need their federal employer identification number or Social Security number, the address of their principal business location, and a $100 registration fee. The DOR will conduct a criminal background check, and registration is valid for one year. After that, tax preparers must renew their registration and post a new tax preparer bond.

Continuing Education Requirement for Tax Preparers in SC

All paid tax preparers must complete at least 24 hours of continuing education every two years. Preparers must document the completion of these hours with an official transcript or certificate. Even if the preparer does not prepare taxes regularly, they must still comply with the suitability of the continuing education requirement. While there is no set list of topics that qualify for this requirement, the DOR suggests that preparers focus on areas such as estate planning, asset protection, retirement planning, and taxation.

License & Bond Requirements for Tax Preparers in SC

If you’re a tax preparer in South Carolina, you’ll need to post a $10,000 surety bond before you can begin filing returns for clients. The SC Department of Revenue has a list of surety companies that issue tax preparer bonds and can help you obtain one. The sealant acts as collateral and protects taxpayers if you mishandle someone’s taxes or otherwise breach the duty of care you owe to your clients. The surety bond is also a type of insurance policy that will cover damages up to the amount of the bond if you’re found to have misappropriated funds or mishandled someone’s taxes.

Pros and Cons of Filing the Tax Preparer Bond in SC

Like all surety bonds, the tax preparer bond is intended to provide a financial backstop if you breach your fiduciary duty to your clients. But in the cases of tax preparers, the bond is also designed to provide an additional level of consumer protection beyond what state-level regulators can provide. The bond ensures that taxpayers who their tax preparer has mistreated have somewhere to turn for recourse. It ensures that the most vulnerable taxpayers are protected from unscrupulous tax preparers. If you’re a tax preparer in South Carolina and you’re wondering whether it’s worth it to post the Preparer Bond, make sure to weigh the pros and cons first.

Conclusion

Preparing taxes can be a complex and confusing process. It’s easy to make a mistake, especially if you’re not a trained professional. All paid tax preparers must register with the South Carolina Department of Revenue and post a $10,000 surety bond. The bond ensures that taxpayers who their tax preparer has mistreated have somewhere to turn for recourse.