Surety Bonds Needed for Nevada Tax Preparers

When the tax deadline approaches each year many people rely on professionals to help with their personal and business tax returns, and if you work in tax preparation you’re probably already experiencing the surge of the tax season rush. This year is the first tax season that tax professionals in Nevada will need a surety bond to help people and organizations prepare and file tax returns. In fact, surety bonds have been required for tax professionals in the state since July 2017.

The new regulations mean that certain tax preparers need a surety bond of $50,000 in order to register with the state. Although this is not a requirement for tax preparers throughout the US, Nevada isn’t the first state to bring in bonding requirements, as California also has bonding regulations for tax preparers. The full regulations were outlined by Nevada Assembly Bill 324, which defines who needs to be bonded, the bond amount, and lists the registration fees.

Why Nevada Now Requires Tax Preparers to Have Bonds

If you’re new to the world of surety bonds you’re probably wondering what they are and why they are required. Put simply, Nevada is using these bonds to protect individuals and businesses from any fraudulent or unethical behavior of a tax preparation professional. They ensure that people have a way to recoup financial losses by providing a reliable claim method, as instead of claiming from the tax preparer they can claim against the bond. Although many people equate surety bonds to insurance, there is one key difference—surety bonds do not protect the person who purchases the bond. Their purpose is to protect the clients of the purchaser. A surety bond is more like a line of credit where the surety agrees to pay claims on the bond but the bondholder, known as the principal, is required to repay the surety.

Get a Tax Preparer Bond in Nevada to Comply with State Regulations

If you’re a CPA, financial planner, or attorney you will be exempted from the bond requirement. However, all other tax preparation assistants will be required to register and purchase a bond to operate legally in the state. More information regarding the application process to become a legal document preparer in Nevada can be found here. Make sure you’re ready for this year’s tax rush by using our online application to obtain the legal document preparer bond you need to comply with all state regulations in Nevada! Viking Bond Service can help you find an affordable bond today.