PTINs Were Not the Problem – it Was the User Fees

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If you are a reader of mine, you will remember an article that I recently wrote about the IRS increasing or planning to increase some user fees. I had mentioned that in the past the IRS had raised the fees for Preparer Tax Identification Number (PTIN) holders.

As it turns out, if you go to the IRS webpage for tax professionals, you will see this:

PTIN System Down

On June 1, 2017, the United States District Court for the District of Columbia upheld the Internal Revenue Service’s authority to require the use of a Preparer Tax Identification Number (PTIN), but enjoined the IRS from charging a user fee for the issuance and renewal of PTINs. As a result of this order, PTIN registration and renewal is currently suspended.

The IRS, working with the Department of Justice, is considering how to proceed. As additional information becomes available, it will be posted on our Tax Pros page.

It’s a little cryptic, if you ask me. So, are we doing away with the PTIN system altogether, or are we just saying that the IRS can’t collect a fee?

I got a PTIN way back when it was first offered as an alternative to tax preparers so we didn’t have to use our Social Security number. When I got a PTIN, it was free. Then the IRS decided that it was going to license tax professionals, and to do so, it required that you get a PTIN.

So, seeing as we were required to get a PTIN, the IRS charged a fee for it. Then each year, we have to pay to renew it.

However, here’s the thing. The IRS can’t license tax professionals, so in theory, we don’t need a PTIN, which became the mechanism by which the IRS tracked continuing professional education (CPE) and everything else. 

Each year, I have to pay $50 to renew my PTIN. Of that $50, $33 goes toward program costs, and $17 goes to a third-party vendor to operate the online system and provide customer support, according to the IRS. 

The court basically told the IRS that it can’t charge a fee anymore. Do we need PTINs? YES. I don’t want my Social Security number on all of these forms I prepare. And it gives the IRS an easy way to track CPE for enrolled agents. 

Let’s see what nonsense the IRS comes up with now. The PTIN was never the problem; it was the yearly shakedown.

Related article:

Is the IRS Right to Increase User Fees?

About Craig W. Smalley, EA

Craig Smalley

Craig W. Smalley, MST, EA, has been in practice since 1994. He has been admitted to practice before the IRS as an enrolled agent and has a master's in taxation. He is well-versed in US tax law and US Tax Court cases. He specializes in taxation, entity structuring and restructuring, corporations, partnerships, and individual taxation, as well as representation before the IRS regarding negotiations, audits, and appeals. In his many years of practice, he has been exposed to a variety of businesses and has an excellent knowledge of most industries. He is the CEO and co-founder of CWSEAPA PLLC and Tax Crisis Center LLC; both business have locations in Florida, Delaware, and Nevada. Craig is the current Google small business accounting advisor for the Google Small Business Community. He is a contributor to AccountingWEB and Accounting Today, and has had 12 books published on various topics in taxation. His articles have also been featured in the Chicago Tribune, New York Times, Yahoo Finance, Nasdaq, and several other newspapers, periodicals, and magazines. He has been interviewed and been a featured guest on many radio shows and podcasts. Finally, he is the co-host of Tax Avoidance is Legal, which is a nationally broadcast weekly Internet radio show.


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Jun 13th 2017 03:40

Any guess on how long this will take to be resolved? I'm currently studying for the EA exam and I can't even register to sit for the test without a PTIN. Talk about frustrating!

Thanks (1)