A PTIN is an identifying number – like a Social Security number – for tax preparers and certain other tax professionals. Since 1999, tax return preparers have been able to use a PTIN on tax returns instead of their Social Security Numbers; they used to be issued for free. The IRS began charging a fee for PTINs in 2010 after the implementation of new rules which made PTINs mandatory.
The system was shut down on 2 June 2017 following a U.S. District Court ruling which barred IRS from charging PTIN fees to tax preparers. However, in the case the Court agreed that the IRS could continue to require the use of PTINs for tax preparers.
On 21st June 2017, the IRS made it clear that they intend to continue to require PTINs, confirming that a tax professional must have a PTIN to file a tax return, to be an Enrolled Agent or schedule an appointment for the Special Enrollment Examination. The difference is, of course, that at least for the time being, the IRS cannot charge a fee to obtain a PTIN.
Helpful guidance from IRS
Q: Are federal tax return preparers still required to have a PTIN?
A: Yes. The court decision upheld the IRS’ authority to require the use of a PTIN. Anyone who prepares, or assists in preparing, all or substantially all of a federal tax return for compensation is required to have a PTIN. All enrolled agents must also have a valid PTIN.
Q: Will PTIN holders be receiving refunds for previous fees paid?
A: The IRS, working with the Department of Justice, is considering how to proceed. As additional information becomes available, it will be posted on IRS Tax Pros page.
Q: If I obtain or renew my PTIN now at no cost, will I have to pay for it later?
A: We can make no determinations with respect to future activity at this time.
Q: Is the PTIN Helpline reopening?
A: Yes. It has also reopened on June 21, 2017.
Q: Is a PTIN still required to file a tax return, to be an Enrolled Agent or schedule an appointment for the Special Enrollment Examination
Q: Will I be able to view my continuing education records when the PTIN system reopens?
A: Yes. All previous information will still be displayed in online PTIN accounts.
Q: Do I need to contact the IRS or file a claim for refund for previously paid PTIN fees?
A: Do not contact the IRS. Any questions regarding claims or refunds should be directed to the PTIN Fees Class Action Administrator at www.ptinclassaction.com.
What does that mean for taxpayers? It’s business as usual. Just as earlier this year, anyone who prepares federal tax returns for compensation must have a valid and current PTIN. PTINs don’t last forever: they must be renewed each year. Without a current PTIN, a tax preparer is not allowed to prepare your return. That is the case even after the most recent court ruling. You can check out PTIN qualifications on your own by using the IRS online PTIN directory.