Annual PTIN User Fee Proposed for Paid Preparers

Tax return preparers who prepare returns after December 31, 2010, will have to obtain a preparer tax identification number (PTIN) each year from the IRS, as provided by proposed regulations. The IRS anticipates that the number of individuals initially requesting PTINs will be as many as 1.2 million individuals, and all individuals who receive PTINs will be required to renew their PTINs. Initially, the government had been considering a three-year registration period, but has now opted for an annual process.

The cost of obtaining the PTIN will be $50. The fee is designed to cover the government’s administrative costs for registration. In addition, a third-party vendor running the program can also charge a fee.

According to the regulations, the purpose of the PTIN is to “allow the IRS to track the number of persons who prepare returns, track the qualifications of those who prepare returns, track the number of returns each person prepares, and more easily locate and review returns prepared by a tax return preparer when instances of misconduct are detected.”

The IRS anticipates the creation of an online registration process, hopefully starting this fall.

Source: REG-139343-08, 7/21/10