Are you a tax preparer looking to obtain or renew your Preparer Tax Identification Number (PTIN)? You could be waiting awhile. The Internal Revenue Service (IRS) has suspended the PTIN registration and renewal system in response to a recent U.S. District Court ruling.
The Court did not find that the PTIN requirement for tax preparers was unlawful. It found quite the opposite, saying there is a “rational connection” between the regulations and the stated reasons for the regulations (“effective administration and oversight”). The Court agreed that the IRS could continue to require the use of PTINs for tax preparers.
However, the Court did bar IRS from charging PTIN fees to tax preparers, with Judge Royce C. Lamberth, writing in Adam Steele, et al. v. United States of America, that “all fees that the defendant has charged to class members to issue and renew a PTIN … are hereby declared unlawful.” The Court also ordered that the IRS has to provide “a full refund of all PTIN fees paid.” The total PTIN fees to be refunded could be more than $175 million.
(More on the Steele ruling here.)
While the IRS may still issue PTINs, the IRS has, for now, shut down the issuance of all PTINs, including renewals. A statement on the IRS website reads:
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.