Feel that? The seasons are changing. And no, I’m not talking about the transition to autumn. With 2017 tax returns filed on extension just barely under their belts, tax professionals are now readying for next tax season, as is the Internal Revenue Service (IRS). As part of those preparations, the IRS is reminding tax professionals that they must renew their Preparer Tax Identification Numbers (PTINs) for 2019.
All current PTINs will expire at the end of the calendar year. It doesn’t matter if you obtained or renewed your PTIN one month ago, or a year ago. The expiration is the same for all tax pros: December 31, 2018.
Who is required to have a PTIN? Any tax professional who prepares or helps prepare any federal tax return, or claim for refund, for compensation must have a valid PTIN from the IRS. Some forms which are used for informational purposes, like forms SS-4 and 2848, are excluded, as well as certain information returns, like forms W-2 and 1099. You can see the entire list of excluded forms and returns here.
You must also have a PTIN to participate in e-Services, Online Tools for Tax Professionals. That means that tax professionals, like attorneys, who might not prepare returns during tax season but need access to e-Services should sign up or renew now. You can’t borrow someone else’s PTIN either: one PTIN per tax professional.
Additionally, all enrolled agents, regardless of whether they prepare returns, must renew their PTIN annually to maintain their active status.
You’ll need to use your PTIN as your identifying number on all of the returns that you prepare. You’ll also typically be asked for your PTIN when you call the IRS on client matters.
Tax season typically begins in January of the new year. But the IRS is asking tax professionals to re-up early. “We ask that you renew your PTIN as soon as possible to avoid a last-minute rush,” said Carol A. Campbell, director, IRS Return Preparer Office. “It’s easy to let this slip as the holiday season approaches.”
But what if you forget? Failure to have and use a valid PTIN may result in penalties. You could also be subject to section 6695 penalties, injunction, and/or disciplinary action by the IRS Office of Professional Responsibility.
Taxpayers should avoid paid preparers who refuse to include a PTIN on a tax return. That might happen because the paid preparer isn’t eligible for a PTIN or because they don’t want to be responsible for the return. Either way, it’s bad news. Those who set up shop and refuse to get a PTIN are sometimes called ghost preparers or black market preparers (for more, click here). Seek out a competent tax preparer who will answer your questions and sign your tax return. You can also check the IRS public directory to find a listing of preparers in your area who currently hold professional credentials recognized by the IRS or who hold an Annual Filing Season Program Record of Completion.
It literally takes a few minutes to renew online. Simply navigate over to www.irs.gov/ptin and log in with your user ID and password.
If you’ve let some time pass by without renewing your PTIN because, for example, you didn’t need it (like me), you’ll have to answer some extra questions. It still only takes a few minutes.
If you’ve never registered, you’ll want to complete the PTIN application. You can do it online. You’ll need a Social Security Number (an Individual Taxpayer Identification Number (ITIN) is not sufficient unless you are a foreign person with a permanent non-U.S. address, and can provide documentation to support your status. You’ll also need to have your home and business information, including name, mailing address, and date of birth; last year’s individual tax return information, including name, address, filing status; explanations for any felony convictions or problems with your U.S. individual or business tax obligations; and any U.S.-based professional certification information (CPA, attorney, enrolled agent, enrolled retirement plan agent, enrolled actuary, certified acceptance agent, or state license), including certification number, jurisdiction of issuance, and expiration date.
There is no fee for obtaining or renewing a PTIN.
And because I know you’re wondering: No, I don’t have an update on the PTIN fees refund situation. In 2014, a class-action suit was filed on behalf of tax professionals who paid PTIN fees prior to the Loving verdict. Those tax professionals alleged that they should not have been required to pay the fees. The court agreed, ruling that the plaintiffs were entitled to refunds worth more than $175 million. The IRS appealed the ruling last year. So far, there’s been no decision – which means no refunds have been issued. You can find out more here.