IRS Proposes PTIN Fees

By Alistair M. Nevius, J.D.

Regulations

On July 21, the IRS proposed (REG-139343-08) to begin charging all authorized tax preparers a $50 user fee to obtain or renew annually a preparer tax identification number (PTIN). The fee would be on top of a “reasonable fee” charged by a third-party vendor that will administer the application and renewal process. The new fee will be effective on the date the proposed regulations are finalized.

While the preamble to the proposed regulations says that a third-party vendor will administer the PTIN application and renewal process and maintain a web-based database that individuals will use to apply for and renew PTINs, it does not specify the vendor fee amount, but the IRS expects it to be “substantially lower” than $50 (IR-2010-86).

The proposed regulations were the latest guidance in the IRS’s push to establish a comprehensive regulatory regime applicable to all paid preparers by the beginning of next tax filing season. For taxpayers who are not CPAs, attorneys, or enrolled agents, the requirements would include testing and continuing education. For more on the IRS’s plan, see News Notes, “IRS Announces Mandatory Registration, Testing, and CPE for Return Preparers,” 41 The Tax Adviser 156 (March 2010).

In late March 2010, the IRS issued its first proposed regulations implementing the plan to revise rules and procedures governing PTINs by requiring all covered return preparers to obtain one and renew it annually as part of the registration requirement. Under those proposed regulations (REG-134235-08, to amend Regs. Sec. 1.6109-2), a PTIN would be required on all tax returns after December 31, 2010. Both signing and nonsigning preparers would be required to use a PTIN, and they would be issued only to CPAs, attorneys, enrolled agents, and preparers who qualify under the new category of registered return preparers. The March proposed regulations also would institute a federal tax compliance check as part of the PTIN issuance process and authorize the user fee that is the subject of the latest proposed regulations.

Current law and regulations require only that paid preparers signing a tax return include an identifying number, which may be either a PTIN or a Social Security number. Currently, PTINs are obtained directly from the IRS without any fee and may be used indefinitely without any required renewal.

The AICPA’s advocacy team and member-based committees have held numerous meetings and filed extensive comments with the IRS and are in the process of reviewing the proposed regulations.

Newsletter Articles

AWARD

James M. Greenwell Wins 2014 Best Article Award

The winner of The Tax Adviser’s 2014 Best Article Award is James M. Greenwell, CPA, MST, a senior tax specialist–partnerships with Phillips 66 in Bartlesville, Okla., for his article, “Partnership Capital Account Revaluations: An In-Depth Look at Sec. 704(c) Allocations.”

 

FEATURE

How Legal Marijuana Businesses Are Treated Federally

This article examines the tax problems that these businesses face and warns that professionals may provide services to them at their peril.