Nevada passed Assembly Bill 280 on May 25, 2019. Effective immediately, the bill modifies Nevada’s document preparation service requirements by changing the amount of the surety bond required to register with the Secretary of State. The legislation sets a fixed bond amount for individuals and allows business entities to file a bond in an amount based on the number of employees. The new legislation also exempts enrolled agents licensed by the federal government and authorized to practice before the Internal Revenue Service from being considered document preparation service providers.
What is a document preparation service provider?
A document preparation service provides business and personal customers with a range of services such as preparing legal or business documents. This bill revised the definition of “document preparation service” to exempt enrolled agents who are authorized to practice before the IRS. A business entity with one or more employees who perform document preparation services may file a surety bond on behalf of all employees.
What does Nevada AB280 have to do with surety bonds for document preparation service providers?
AB280 made several changes regarding surety bonds for document preparation service providers. The bill now allows a business entity to file a surety bond to cover multiple employees of the same entity who prepare documents. Previously, the bond amount was set at $50,000 for businesses and individuals, however, AB280 lowers the bond amount for individuals to $25,000 and establishes a range of bond amounts for businesses. The amount is based on the number of registered employees and ranges from $25,000 to $200,000.
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How much will surety bonds for Nevada document preparation service providers cost now that AB 280 has passed?
Surety bonds for Nevada document service providers are subject to underwriting, meaning the exact cost to be paid by an applicant is largely based on their credit. Applicants with good credit may qualify to pay as little as $8 for every thousand dollars of coverage. For example, if an individual needs a $25,000 bond and is approved at a rate of $8 per $1,000, their bond will cost just $200.
Because their required bond amount will most likely change, current licensees may be subject to pay a higher or lower premium than in years past, even if they are approved at the same rate.
What else is changing under the new law?
The bill revises the definition of “document preparation service” to exempt enrolled agents who are authorized to practice before the IRS. AB280 establishes that certain prohibitions apply to a document preparation service but not a registrant.
The new legislation also says a registrant who is aNevada notary in good standing with the Secretary of State may use the term “notary public” in advertisements or written descriptions.
The Secretary of State will deny a document preparation service application if the applicant has had their appointment or registration as a notary suspended or revoked in any state. The bill authorizes the Secretary of State to suspend the registration of anyone licensed to provide preparation services who is appointed as a notary and whose appointment has been suspended. It also provides rules for the reinstatement of registration. Reinstatement is possible upon showing proof the suspension has been lifted as long as the registration did not expire during the suspension.
Ready to apply for your surety bond?
Although the bond amount is changing, SuretyBonds.com has years of experience issuing legal document preparer bonds, meaning they can get you bonded while saving you time and money. Visit our dedicated Nevada document preparer bond page to apply online, or give us a call at 1 (800) 308-4358 to speak to an expert today!