IRS Provides PTIN Guidance for Preparers Without a Social Security Number

In Rev. Proc. 2010-41, released on October 26, the IRS has provided a process for individuals without a Social Security number to obtain a preparer tax identification number (PTIN). Paid tax return preparers are required to register with the IRS and obtain a PTIN, and part of the PTIN registration process requires an individual to submit a valid Social Security number. However, foreign persons (who, for example, may prepare tax returns for U.S. taxpayers who live abroad) may be ineligible to obtain a Social Security number. There are also U.S. citizens who do not have a Social Security number due to a conscientious religious objection.

The revenue procedure sets forth a two-part process through which such return preparers can obtain a PTIN: First, they must complete either the IRS’ online PTIN application or the paper Form W-12, IRS Paid Preparer Tax Identification Number (PTIN) Application. Second, they must submit a completed Form 8946, PTIN Supplemental Application for Foreign Persons Without a Social Security Number, or Form 8945, PTIN Supplemental Application for U.S. Citizens Without a Social Security Number Due to Conscientious Religious Objection, and submit the additional documentation outlined in the forms’ instructions.

Because complying with this two-step process, especially the additional documentation requirements, may take time, the IRS is allowing preparers who are foreign persons or U.S. citizens without a Social Security number due to conscientious religious objection additional time to comply. The IRS will consider such return preparers to have complied with the PTIN requirements if they complete the online application or submit a completed paper Form W-12 by the later of January 31, 2011, or 10 days after the first day on which they prepare all or substantially all of a U.S. tax return for compensation, and they submit a completed Form 8945 or Form 8946, including any required additional documentation, within 60 days after the completion of the online application or submission of the paper Form W-12.

Under this transition rule, such preparers will be considered to be in compliance with the PTIN rules and may prepare and sign U.S. tax returns and claims for refund without providing a PTIN for returns prepared on or before October 31, 2011.