Bonds are indicators that a person such as a business owner has satisfied certain licensing requirements and demonstrated an ability to provide a surety bond which indicates financial security. These bonds are enforced by government agencies as a way of safeguarding consumers in the event that those businesses which handle customers’ funds engage in unlawful practice. By possessing these bonds consumers are assured that any loss of funds due to unlawful or negligent practice on the part of the business owner, will be recovered. With tax collector bonds the public is assured that the tax collectors will adhere to certain laws.
As with any surety bond, three parties are essentially linked together: the principal, obligee, and the surety. The principal is the tax collector who actually applied for the bond and who is responsible for covering any losses resulting from malpractice. The principal is required to comply with all laws and regulations agreed upon when entering into and accepting the bond. The obligee is the specific government agency which requires and enforces the bond. Finally, the surety is the company which issues the bond to the principal and provides a form of financial guarantee to the obligee. This guarantee is that the principal will fulfill their adherence to the rules and reimburse funds lost due to the business’ mishandling.
Essentially what all of this means to the consumer is that working with a professional who holds a tax collector bond signals to the consumer that they are working with a professional who will perform their duties with honesty and integrity. Elected and hired tax officials who are bonded will carry out their duties – in particular the treatment of tax funds – as laid out by the law. Such bonds may also be used to cover local tax authorities, tax assessors or tax collectors. There are a myriad of occupation and role specific tax collector bonds given the various roles and responsibilities required. The roles of those working in various tax related fields exist on federal, state and municipal levels and the handling of these funds from citizens should, understandably, be under scrutiny. Each jurisdiction is responsible for overseeing the rules and regulations which govern those working in the tax industry. Many government agencies will require the amount of the bond to total the exact value of the amount of money the officials will be managing. Since these amounts can be quite enormous, there are some areas which will place a maximum value on the required bond which may otherwise make it difficult to attain.
For taxpaying consumers, tax collector bonds provide peace of mind that their tax officials are held financially responsible if they unlawfully mismanage funds. Additionally, these bonds can ensure that the public tax dollars are appropriately allocated to help alleviate concerns of fraudulent actions.
Depending on the work related duties of an individual, more than one type of surety bond may be required. For example in some jurisdictions a tax collector bond would suffice when an individual is working in a collections capacity, but depending on the state’s laws if they also act as an assessor they may require an additional bond. Those working privately in the tax industry should consult their insurance agent to inquire about their experience with bonds and whether or not their agent can assist them. If not, tax professionals can find pertinent resources on the internet regarding applying for this type of surety bond. Those working in various levels of government or government run agencies should confirm that as employees they are protected under the government’s surety bond certificate. If not then they must follow procedures required to obtain such a bond.