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Fees Possible for New Tax Preparer ID

irs logoProposed requirements for professional tax preparers hold out the possibility that professionals might be required to pay for applying for and obtaining identification numbers, the PTINs that are a key part of new regulations proposed by the Internal Revenue Service. The IRS estimates that the requirements would affect as many as 1.2 million tax preparers, with about 70 to 80 percent of these employed in businesses that earn less than $8.5 million each annually 

While the agency envisions continuing education requirements would probably produce costs for firms only a small percentage of small entities would have to radically alter business practices or go out of business.

The changes are part of a program that the IRS said is necessary to ensure better quality preparation services and to reduce poor or unethical practices. The proposals are open for comment until April 26, CPAs, tax attorneys and enrolled agents would be exempt for the requirement for additional continuing education and minimum competency examinations that would be mandated for other professional preparers. But they would not be exempt from possible fees, which might be paid more than once if the numbers expire periodically.

There will be a transition period this year during which preparers about to user Social Security numbers or PTINs for returns or claims filed before January 1. After that date, SSNs cannot be used and preparers must used a PTIN or will be subject to penalties unless they can prove the cause was due to reasonable cause, not to willful neglect. PTINs may have expiration dates and preparers who fail to renew lapsed registrations would also face possible discipline. The IRS left its options open by stating that preparers and staffs would have to have a PTIN or other prescribed ID number.

When they apply for PTINS preparers may be subject to initial and periodic checks of whether they have filed and paid personal and business taxes on time or made arrangements with the IRS subject to an approved installment agreement.

The IRS provided examples to demonstrate which firm employees might be subject to filing for a PTIN. A staff member who answers telephone calls, makes copies and enters data into tax software would not need a number. But an employee who determines the amount and character of entries on returns and whether the information provided is sufficient for preparing returns for another person would need to obtain a number, whether a PTIN or other designation that might be required.

Reviewers would have to get PTINs while a tax expert whose advice was sought on a specific item in a return, for example a tax credit, would not.


Bob Scott
Bob Scott has provided information to the tax and accounting community since 1991, first as technology editor of Accounting Today, and from 1997 through 2009 as editor of its sister publication, Accounting Technology. He is known throughout the industry for his depth of knowledge and for his high journalistic standards.  Scott has made frequent appearances as a speaker, moderator and panelist and events serving tax and accounting professionals. He  has a strong background in computer journalism as an editor with two former trade publications, Computer+Software News and MIS Week and spent several years with weekly and daily newspapers in Morris County New Jersey prior to that.  A graduate of Indiana University with a degree in journalism, Bob is a native of Madison, Ind
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