As a means to increase oversight over federal tax return preparation, the IRS has issued final regulations that require all individuals who receive compensation for preparing all or substantially all of a federal tax return or claim for refund after December 31, 2010, to have a Preparer Tax Identification Number (PTIN). Under the new regulations, compensated tax return preparers will have to obtain, or reapply for, a PTIN through the IRS’s new system. Compensated tax return preparers will also be required annually to pay a user fee for obtaining a PTIN and using the system. The user fee is $64.25 for the first year.
Pursuant to the regulations, compensated tax preparers that currently possess a PTIN are still required to register in the system, although they generally will be reassigned the same number. Moreover, any individual who plans to prepare all or substantially all of a tax return for compensation will be required to obtain a PTIN regardless of whether the individual is subject to the testing and continuing education requirements that will be required under Circular 230, the rules governing practice before the IRS.
The IRS recently announced that the new online application system for compensated tax return preparers is now functional. Compensated tax preparers are able to access the online application system through the Tax Professionals page of the IRS website — www.irs.gov.