IRS website
IRS website

The Internal Revenue Service (IRS) has reopened its Preparer Tax Identification Number (PTIN) System.
The system was shut down earlier this month following a U.S. District Court ruling which barred IRS from charging PTIN fees to tax preparers. However, in the case, Adam Steele, et al. v. United States of America (Case No. 1:14-cv-01523-RCL), the Court agreed that the IRS could continue to require the use of PTINs for tax preparers. A PTIN is an identifying number – like a Social Security number – for tax preparers and certain other tax professionals. Since 1999, tax return preparers have been able to use a PTIN on tax returns instead of their Social Security Numbers; they used to be issued for free. The IRS began charging a fee for PTINs in 2010 after the implementation of new rules which made PTINs mandatory.
Today, the IRS made it clear that they intend to continue to require PTINs, confirming that a tax professional must have a PTIN to file a tax return, to be an Enrolled Agent or schedule an appointment for the Special Enrollment Examination. The difference is, of course, that at least for the time being, the IRS cannot charge a fee to obtain a PTIN.
What does that mean for taxpayers? It’s business as usual. Just as earlier this year, anyone who prepares federal tax returns for compensation must have a valid and current PTIN. PTINs don’t last forever: they must be renewed each year. Without a current PTIN, a tax preparer is not allowed to prepare your return. That is the case even after the most recent court ruling. You can check out PTIN qualifications on your own by using the IRS online PTIN directory.
For tax professionals, more changes may yet be coming. The IRS notes that it is “working with the Department of Justice” and “is still considering how to proceed” but is making PTINs available while deciding how to address the court order. That means that tax professionals can now obtain a PTIN, without charge. However, the IRS isn’t ruling out future charges, stating on the website:

Q: If I obtain or renew my PTIN now at no cost, will I have to pay for it later?
A: We can make no determinations with respect to future activity at this time. (emphasis added)

The agency says that additional information about PTINs or fees will be posted on the Tax Pros page of the IRS website.
And now the money shot: the Court in Steele also ordered the IRS to provide “a full refund of all PTIN fees paid.” The total PTIN fees to be refunded could be more than $175 million (some estimates put the number at more than $200 million). If you’re looking for your PTIN refund, don’t call the IRS. The IRS advises that “[a]ny questions regarding claims or refunds should be directed to the PTIN Fees Class Action Administrator at www.ptinclassaction.com.”

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Author

Kelly Erb is a tax attorney and tax writer.

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