Referrel fee

[QuestionGuy101]

What is the name of your state? California

Is it ok to pay referrel fee to someone who referred you a tax client? What about if that person is neither a CPA, EA nor a licensed tax preparer?

[LdiJ]

Originally Posted by QuestionGuy101

What is the name of your state? California

Is it ok to pay referrel fee to someone who referred you a tax client? What about if that person is neither a CPA, EA nor a licensed tax preparer?

Referral fees are very common in many different areas, including tax preparation. There is actually no such thing (at the moment) as a licensed tax preparer. Most tax offices have at least one EA on staff.

[abezon]

Actually, many states require all tax preparers to be licensed, whether EAs or not. Oregon is one. A referral fee would only be a problem if the state tax preparer ethics board forbade it. Even then, a disclosure to the potential client probably satisfies the law. Contact the state board and ask. If you aren't required to be licensed, just pay the fee & deduct it as an expense.

[LdiJ]

Originally Posted by abezon

Actually, many states require all tax preparers to be licensed, whether EAs or not. Oregon is one. A referral fee would only be a problem if the state tax preparer ethics board forbade it. Even then, a disclosure to the potential client probably satisfies the law. Contact the state board and ask. If you aren't required to be licensed, just pay the fee & deduct it as an expense.

Are you sure that its "many" states that license all preparers? This is actually the first I have heard of that....and I have been following the federal "debate" on that issue for a long time now.

[abezon]

Sure. Let's count them up. One....two....many.....many......more! I know Oregon & Ohio do. Washington is considering it. (Although we can't even decide whether to license tattoo & massage parlors, so the tax pros are probably safe for a while.) Perhaps "some" would have been a better word.