Regulations finalize PTIN fees for tax return preparers

The IRS issued final regulations (T.D. 9997) on Tuesday that finalize the reduction of the fees for the application and renewal of preparer tax identification numbers (PTINs) to an $11 user fee plus an $8.75 third-party contractor fee, for a total annual fee of $19.75. That fee amount has been in place since Oct. 19, 2023.

The final regulations adopt the text of interim final and proposed regulations issued in 2023 without change. No public hearing was requested, and the IRS received no comments on the interim final or proposed regulations, the agency said.

The previous total of $30.75 was discarded after a district court, in February 2023, held in Steele, No. 1:14-cv-1523-RCL (D.D.C. 2/21/23), that the PTIN fees the IRS was charging were excessive. In accordance with the biennial review requirement for the PTIN fees in OMB Circular A-25 and considering the district court’s decision in Steele, the IRS recalculated the amounts of the user fee and the third-party contractor fee.

The IRS arrived at the $11 user fee by estimating that the cost of providing PTINs for fiscal year 2024 through fiscal year 2026 is $27.4 million, including labor and benefits, travel, training, supplies, and overhead. With the number of applicants over those three years estimated at 2.5 million, the cost per application comes out to $10.79.

The $8.75 third-party contractor fee may change in 2026 when the current contract expires and the amount is recomputed, the IRS said previously. The contractor issues, renews, and maintains PTINs, the IRS said. The 2023 PTIN fee of $30.75 included a contractor fee of $9.75.

The IRS requires that anyone who, for compensation, prepares or assists in the preparation of any federal tax return or claim for refund submitted to the IRS obtain a PTIN.

— To comment on this article or to suggest an idea for another article, contact Martha Waggoner at Martha.Waggoner@aicpa-cima.com.