All paid tax return preparers, including attorneys, CPAs, and enrolled agents, must apply for a Preparer Tax Identification Number (PTIN) from the Internal Revenue Service before signing and filing any federal tax returns in 2011. Paid preparers who already have a PTIN must renew it.
After December 31, 2010, tax return preparers must use a PTIN and may not use a Social Security Number as a preparer-identifying number, according to the IRS.
The fee for obtaining a PTIN is $64.25 per year, except for enrolled agents. The IRS is recalculating the $125 enrolled agent renewal fee. A reduced fee amount has not yet been announced.
This fee is in addition to any fee that paid preparers must pay for any other certifications or licenses they hold. Because attorneys, CPAs, and enrolled agents are exempt from testing, they will not be required to pay the separate testing fee.
The IRS has set up an online PTIN application system on its Web site: New PTIN Requirements for Tax Return Preparers.
The site instructs applicants to follow four steps:
- Create your account – First, you must create an account by providing your name, e-mail address, and security question information. The system will then e-mail your temporary password, which you will change when you go back to enter your information in the PTIN application.
- Apply for your PTIN – You will complete the online application by providing personal information, information about your previous year’s tax return, and professional credentials. See a checklist of what you need before you start.
- Pay your fee – The application will transfer you to an IRS partner bank where you will make your payment by credit card or direct debit.
- Get your PTIN – After the bank confirms your payment, your PTIN is provided online. If you already have a PTIN, you will retain the same number in most cases. You also will receive a welcome letter providing additional guidance.
The PTIN application system will search for an existing PTIN assigned to a matching name, Social Security number, and birth date, and if matching information is found, the applicant will be given the same number. Provisional PTINs are assigned to applicants who are subject to testing requirements, are not in compliance with their federal tax responsibilities, or have been convicted of a felony in the last 10 years. The provisional status is temporary. The online process takes approximately 15 minutes, according to the IRS.
A tax return preparer may use the paper application, Form W-12, IRS Paid Preparer Tax Identification Number Application. The IRS states it will take 4 to 6 weeks to process a paper application.
The requirement to obtain a PTIN number is the first in a series of steps that paid preparers must take before they can file tax returns in 2011. After applicants obtain a PTIN number, they will receive information about next steps, including testing and continuing education requirements, if applicable.
Additional tips for PTIN applicants can be found in the Frequently Asked Questions section of the IRS Web site: New Requirements for Tax Return Preparers: Frequently Asked Questions.