Regulations Lower PTIN User Fee

By Sally P. Schreiber, J.D.

The IRS issued temporary regulations lowering the user fee for preparer tax identification numbers (PTINs) from $50 for new or renewal PTINs to $33 (T.D. 9742). Combined with the third-party vendor fee, applicants will pay a total of $50 under the new rates. PTINs must be obtained by everyone who prepares or assists in preparing a tax return or claim for refund for compensation.

The reduced fee was effective Nov. 1, 2015, and the start of the PTIN application and renewal period was delayed from Oct. 15 to Nov. 1 to effectuate the change. According to the IRS, being able to prepare tax returns and claims for refund for compensation is a special benefit, which justifies the user fee the IRS charges.

The separate fee charged by the third-party vendor to process those applications increased from $14.25 for new applicants and $13 for renewals to $17 for both. The IRS says the amount of the PTIN user fee is based on the direct costs of administering the program, including staffing and contract-related costs for the electronic and paper registration and renewal submissions; tax compliance and background checks; professional designation checks; foreign preparer processing; compliance and IRS complaint activities; information technology and contract-related expenses; and communications.

The lowered fee is the result of a number of factors, including the smaller number of applicants and the recognition that many of the activities of the registered tax return preparer program invalidated in Loving, 917 F. Supp. 2d 67 (D.D.C. 2013), aff'd, 742 F.3d 1013 (D.C. Cir. 2014), are not being performed. The IRS also removed expenses for administering the programs to educate and test enrolled agents and enrolled retirement plan agents from the fee calculation.

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