In orders for a tax preparer to conduct business in most states, he or she must hold a current tax preparer bond. The bond simply ensures that the tax preparer complies with the laws and standards of the applicable state tax council (in California, for example, the California Tax Education Council) while performing his or her duties as a tax preparer.
The bond is meant to guarantee that any fees or fines levied as a result noncompliance with the laws and/or professional standards of a particular state will be fully paid. This guarantee is intended to benefit not only the consumer that has retained the services of the tax preparer, but also the state in which the tax preparer does business.
