PTIN (Preparer Tax ID Number)
Latest PTIN news
Effective July 15, 2020 the IRS began charging a fee of $35.95 to obtain or renew a Preparer Tax ID Numbers (PTIN). This fee consists of:
- $21.00 renewal fee
- $14.95 fee payable to a contractor (covers processing applications, renewals and operating a call center)
Prior to that date, the PTIN was free to obtain or renew, dating back to 2017, as a result of the lawsuit detailed below.
Renewing your PTIN
Who? Anyone who, for compensation, prepares all or substantially all of any federal tax return or claim for refund must obtain a PTIN issued by the IRS.
All Enrolled Agents must obtain a PTIN and renew it annually, separate from their EA license.
When? You normally renew your PTIN during the renewal period starting November 1st. PTINs are renewed annually, and expire December 31st for the year of renewal. If you allow your PTIN to expire, you can renew it at anytime.
How? Online at the IRS website: www.irs.gov/ptin
Preparers do not need any CE to renew their PTIN.
Lifetime use? Taxpreparers keep the same PTIN for life, even if you let it lapse and renew it later. Currently there are no late fees or penalties for late renewal.
What else? You are required to have a PTIN if you prepare returns for a fee, however the AFSP program is completely optional, although it does provide some benefits in client represenation and marketing.
History of the PTIN
Who is affected by the PTIN system?
Enrolled Agents (EA) are required to maintain a current PTIN, and can use the system to check on the reporting of CPE courses completed.
Annual Filing Season Program (AFSP) participants must also have a current PTIN, and can check on the reporting of CPE courses completed.
All Tax Preparers: Anyone who prepares or assists in preparing federal tax returns for compensation must have a valid PTIN before preparing retuns.
CPE Providers approved by the IRS, such as FunCPE who report completed courses to the PTIN system.
What has the PTIN fee been in the past?
The Preparer Tax Identification Number was created by the IRS in 1999 to protect the privacy of tax return preparers. Prior to the availability of PTINs, tax preparers were required to sign the tax forms they prepared and provide their Social Security Numbers. Starting with the 2000 tax season, the IRS gave preparers the option of using either their SSNs or PTINs. Initially there was no charge to obtain a PTIN. In 2010 the IRS began requiring the use of PTINs and began charging an annual fee to obtain or renew one.
Although originally there was no charge to obtain or renew a PTIN, the fee was as high as $64.25/$64 to obtain/renew a PTIN just prior to November 1, 2015. As of Novemeber 1, 2015 the annual fee was reduced to $50 for both new and renewed numbers.
The IRS stated at the time that of this $50 fee, $33 is “a user fee to support program costs” and a third party vendor gets the remaining $17 to operate the online system and provide customer support.
Lawsuit filed against the IRS in 2017 about PTIN fees
On June 1st, 2017 the IRS shut down the PTIN system in response to a recent court ruling. Why?
Federal district court ruled the IRS does not have the right to charge fees
IRS Statement on Suspending PTIN Renewals and Issuances
The following statement was posted on the irs.gov site:
“On June 1, 2017, the United States District Court for the District of Columbia upheld the Internal Revenue Service’s authority to require the use of a Preparer Tax Identification Number (PTIN), but enjoined the IRS from charging a user fee for the issuance and renewal of PTINs. As a result of this order, PTIN registration and renewal is currently suspended.
The IRS, working with the Department of Justice, is considering how to proceed. As additional information becomes available, it will be posted on our Tax Pros page.”
Will the IRS refund the past PTIN fees paid?
Maybe. The lawsuit related to this shutdown was brought by two CPAs in 2014, who sued the IRS over the PTIN fees on behalf of the over 700,000 tax preparers who pay PTIN fees annually. Estimates are as high as $245 million in fees charged since the initial 2010 regulations issued for registering tax preparers with PTINS (remember the RTRP program?).
As usual feel free to contact us if you have any questions about this. We will update this page if any news comes out from the IRS about the status of the renewal process and fees.