Tax Preparer Permits & Licenses in Los Angeles, California

Required for all LLCs. Statement of Information (Form LLC-12) due within 90 days of formation ($20 fee), then biennially ($20 renewal).

Applies to all California LLCs.

Required for ALL non-credentialed tax preparers in CA preparing tax returns for compensation. CTEC established by AB 2138 (effective 2023). 60-hour education course prerequisite. No exam required.

Statewide registry optional; county filing required if advertising locally. Publish in newspaper within 30 days in some counties.

Tax preparers typically do not need this unless selling related merchandise.

Required for all LLCs except single-member disregarded entities without employees.

Tax preparation services are generally not subject to California sales tax. However, if the business sells tax software, forms, or other taxable goods, a sales tax permit is required. See CDTFA Publication 109, Section 2.

Registration includes withholding of state income tax from employee wages. Employers must also report new hires to EDD within 20 days of hire.

UI tax applies to employers with one or more employees. Rate varies based on experience rating; new employers pay 3.4% on first $7,000 of wages per employee annually.

All LLCs doing business in California must pay an annual $800 franchise tax, regardless of income or activity. This is separate from federal income tax. Effective January 1, 2022, new LLCs pay $800 starting in their second taxable year (first-year waiver applies only to the first year).

In addition to the $800 annual franchise tax, LLCs must pay an additional fee based on gross revenue. See FTB Form 3522. Fee is not a substitute for the $800 tax.

Most California cities require a business license or tax registration. For example, Los Angeles charges $108/year for a Business Tax Registration Certificate. Check with the city or county clerk where the LLC operates. See https://www.lacity.org/your-government/departments/office-business-tax/business-tax-registration

LLCs in California are required to file Form 568 (Limited Liability Company Return of Income) annually, even if no tax is due. This is in addition to the $800 franchise tax. Members report income on their personal returns.

Required for all businesses; Tax Preparers classified under business code 61500. Online application available.

Not required in incorporated cities; Tax Preparers may fall under professional services.

Tax Preparer services typically allowed if <25% of home used, no client visits, no signage. See LA Municipal Code Sec. 12.05.

Tax Preparers permitted in most commercial zones (e.g., C-2); verify via ZIMAS tool at https://zimas.lacity.org

Required for permanent signs > certain size; LA Municipal Code Chapter IX, Art. 2. Electronic reader board signs restricted.

Tax Preparer office typically "Business Occupancy"; see CFC Section 105.6. Low hazard doesn't always exempt.

Required for all commercial alarms; LAMC 57.5803. Tax offices recommended due to cash/documents.

Required if work exceeds maintenance; LA Municipal Code Sec. 91.106. Professional office typically minor.

Existing office space may have valid CO; verify records. LAMC Sec. 91.8602.

Required for all employers in California regardless of business type. Sole proprietors without employees are exempt but may elect coverage. LLCs with employee(s) must carry coverage.

Not legally required by the State of California for tax preparers. However, may be required by landlords, clients, or professional associations. Strongly recommended for protection against third-party bodily injury or property damage claims.

Required only if electronically filing 10 or more individual income tax returns per year. Must carry minimum $5,000 bond or $5,000 E&O insurance policy per IRS Rev. Proc. 2023-15. This is a federal requirement enforced through the IRS e-file program, not a California state mandate.

Paid tax preparers who e-file 10+ individual returns annually must either obtain a $5,000 bond (Form 6689) or a $5,000 professional liability (E&O) insurance policy. This is part of IRS e-file requirements. Not a California state-level bond.

Required for any vehicle registered to or regularly used by the LLC for business purposes. California mandates minimum liability coverage: $15,000 bodily injury per person, $30,000 per accident, $5,000 property damage. Personal auto policies typically exclude business use.

Not required for tax preparers in California, as they do not manufacture or sell physical products. Only relevant if business sells tangible goods (e.g., tax software on physical media), which is not typical for this industry.

Not required unless the business holds an alcohol license (e.g., hosts events with alcohol service). Tax preparation offices do not typically serve alcohol and are not subject to this requirement.

California does not currently require a surety bond for tax preparers at the state level. The only bonding requirement is federal (IRS) for e-file eligibility. CDTFA (California Department of Tax and Fee Administration) does not impose bonding for income tax preparers.

All LLCs must obtain an EIN regardless of whether they have employees. This is required for federal tax reporting purposes. Even single-member LLCs without employees may need an EIN if they elect to be taxed as a corporation or have pension plans.

A California LLC engaged in tax preparation must file Form 1065 (if multi-member) or Schedule C (if single-member) with Form 1040. If the LLC has elected corporate taxation, Form 1120 is required. This applies to all LLCs, not just tax preparers, but is mandatory for proper federal compliance.

This is specific to tax preparers. IRS Circular 230 governs practice before the IRS and requires adherence to ethical standards, due diligence, and accuracy in tax return preparation. Applies to all paid preparers, including those in an LLC structure. Updated rules effective January 1, 2023 reinforce due diligence requirements.

Every individual tax preparer in the LLC must obtain and renew a PTIN annually. This is specific to tax preparation businesses. The business itself does not get a PTIN—each preparer does.

Tax professionals who file more than 10 returns annually must e-file using IRS-authorized software and register as an e-file provider. This applies to the business (LLC) as a transmitter. Registration with the IRS e-file program is required. Effective for all paid preparers meeting volume threshold.

While not unique to tax preparers, the business must accurately report capital gains/losses from any business assets (e.g., computers, software) on Form 8949 and Schedule D. As a tax preparation business, recordkeeping must meet higher scrutiny standards under IRS audit guidelines.

If the LLC hires employees (e.g., junior preparers, administrative staff), it must comply with federal minimum wage, overtime pay, and recordkeeping rules. Tax preparers are typically exempt under the "learned profession" category if salaried and meeting duties test. Applies only if employees are hired.

Required for all U.S. employers. The LLC must complete Form I-9 for each employee to verify identity and work authorization. Applies only if the business hires staff.

FMLA requires eligible employers to provide up to 12 weeks of unpaid, job-protected leave for qualifying reasons. A tax preparation LLC is subject to this only if it meets the employee threshold. Most small tax prep firms do not meet this, but must comply if they grow.

OSHA requires employers to provide a safe workplace. For a tax preparation office, this includes ergonomics, electrical safety, emergency exits, and posting the OSHA Job Safety and Health poster (available at no cost). Most requirements are minimal for office-based businesses. Applies only if employees are present.

Tax preparation services are considered a "place of public accommodation." The business must ensure physical access (if operating a client-facing office) and digital accessibility (website, client portals) for people with disabilities. DOJ has clarified that websites must be accessible under ADA. Applies even to small businesses.

FTC enforces truth-in-advertising rules. Tax preparers must ensure all claims (e.g., "maximum refund guaranteed") are substantiated. Misleading guarantees or fake "IRS affiliation" are prohibited. Specific FTC guidance applies to tax preparation services, especially around refund anticipation loans and deceptive marketing.

EPA regulations do not apply to standard tax preparation businesses, which do not generate hazardous waste or emit pollutants. This requirement is not applicable unless the business engages in unrelated industrial activity.

If the LLC uses phone calls or text messages to solicit clients, it must comply with the Telephone Consumer Protection Act (TCPA). Requires prior express consent for autodialed or prerecorded calls. Must honor Do Not Call requests. Enforced by FCC.

There is no federal license required to operate as a tax preparer beyond the PTIN and EIN. However, unenrolled preparers have limited representation rights before the IRS. Only CPAs, Enrolled Agents, and attorneys may represent clients on all matters. This is a key distinction for federal compliance.

All California LLCs must pay an annual $800 franchise tax, regardless of income or activity. This is separate from federal taxes. Late payments incur penalties and interest.

Prohibits misleading claims such as "guaranteed maximum refund" or "IRS-approved." All marketing must be truthful and substantiated. Enforced by CA AG and local DAs.

Applies if LLC has >$25M revenue, buys/sells data of 100K+ consumers, or derives >50% revenue from personal info. Requires privacy policy, consumer request response, and data minimization.

Required for all LLCs registered in California. File Form LLC-12 with the California Secretary of State.

Mandatory for compensated tax preparers under CDTFA regulations. Bond ensures compliance with tax laws.

Required for each tax preparer in the LLC. Must be renewed yearly regardless of state-level licensing.

CE must be completed through IRS-approved providers. Applies to all federal tax preparers regardless of state.

Contact local city or county clerk to confirm requirements. Most cities require annual renewal.

EIN itself does not expire, but changes (e.g., responsible party, address) must be reported using Form 8822-B.

Withholding tax returns (DE-9) due annually by January 31; DE-9C due quarterly by last day of month following quarter.

Self-employment tax and income tax must be paid quarterly using Form 1040-ES.

Use Form 540-ES to make payments. Due dates align with federal schedule.

Keep tax records for at least 3 years. Employment tax records: 4 years. Supporting documents (receipts, invoices): 3–7 years.

Required posters include: Minimum Wage, Workers’ Compensation, EEO, Injury & Illness Prevention, Sexual Harassment Prevention.

Required for all employers covered by FLSA. Available for free download from DOL website.

Applies to all LLCs doing business in California, regardless of income. First-year exemption may apply.

Required for electronic filing (e-file). Must maintain current PTIN, EFIN (if applicable), and credentials.

LLC must maintain a valid registered agent with physical address in California. Changes must be filed via Form LLC-12.