PTIN Fees Proposed by IRS

The IRS proposed (REG-139343-08) July 22 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 or the vendor fee amount. Those and other details would be addressed in later guidance, the IRS said.

The proposed regulations were the latest guidance in the IRS’ 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 the IRS’ plan, see Publication 4832, Return Preparer Review, on the IRS website.

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.

In late March 2010, the Service issued its first proposed regulations implementing the plan, to revise rules and procedures governing PTINs to require 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.

For the proposed regulations issued Wednesday, the IRS requested comments to be received by August 23. Comments may be submitted electronically at www.regulations.gov or by mail to CC:PA:LPD:OR (REG-139343-08), Room 5205, IRS, P.O. Box 7604 Ben Franklin Station, Washington, DC 20044. A public hearing will be held on August 24 at 10 a.m. in the auditorium of the IRS Building at 1111 Constitution Ave. NW, Washington D.C. Persons who wish to present oral comments at the meeting must submit written comments and an outline of the topics to be discussed by August 23.