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IRS Issues Guidance on PTIN Renewals

The IRS issued Notice 2011-80 today, requiring PTIN holders to annually renew their PTINs.

Background

The IRS has published final regulations providing that after December 31, 2010, all individuals who prepare all or substantially all of a tax return or claim for refund for compensation must have a PTIN and must use that PTIN as their sole identifying number. The PTIN comes at the price of a $50 user fee to the IRS, plus any IRS approved fee charged by the third-party vendor, to initially obtain and to annually renew a PTIN.

Only attorneys, certified public accountants, enrolled agents, registered tax return preparers, and individuals authorized under § 1.6109-2(h) are eligible to receive a PTIN.

Renewal Process

The IRS has decided that all PTINs must be renewed on a calendar year basis using the IRS’s online PTIN application available at www.irs.gov or paper application, Form W-12, IRS Paid Preparer Tax Identification Number (PTIN) Application and pay the required fee (currently $64.25, $50.00 IRS user fee plus $14.25 vendor fee) after October 15th and before January 1st each year.

PTINs renewed during this period will be valid from January 1st through December 31st of the following calendar year. PTINs obtained or renewed during a calendar year will expire on December 31st of that year.

Individuals obtaining a new PTIN after October 15th will have the option of receiving a PTIN for the current calendar year or the following calendar year. Individuals who choose to receive a PTIN for the current calendar year will be required to renew their PTIN before January 1st to prepare returns during the following calendar year. Individuals who choose to receive a PTIN for the following calendar year may not prepare tax returns for compensation during the remainder of the current calendar year. Instead, the PTINs issued to these individuals will be valid for the following calendar year.

To assist with the transition to a calendar year renewal period, the IRS has determined that PTINs issued after September 27, 2010 and before October 16, 2011 will expire on December 31, 2011.