The question did not contain "first failure" I believe the correct answer should be $5,000
Platinum reading material:
According to California Business & Professions Code Section 22253.2, and California Revenue &
Taxation Code Section 19167, when a person prepares a tax return, for a fee, without the appropriate
lawful designation, the Franchise Tax Board, pursuant to an agreement with the California Tax
Education Council, will do the following: (1) The amount of the penalty under the subdivision for the
first failure to register is two thousand five hundred dollars ($2,500). This penalty shall be waived if
proof of registration is provided to the Franchise Tax Board within 90 days from the date of notice of
the penalty which is mailed to the tax preparer. (2) The amount of the penalty for a failure to register,
other than the first failure to register, is five thousand dollars ($5,000).