As tax season comes to a close, the IRS is looking ahead to the next tax season, and many taxpayers are following suit by reaching out to tax and financial professionals to discuss year-end strategies. It’s also the perfect time for tax professionals to renew their Preparer Tax Identification Number (PTIN). PTINs are necessary for any tax professional who prepares or assists in preparing federal tax returns and receives compensation. Failure to have a current PTIN could result in penalties, injunction, and disciplinary action by the IRS Office of Professional Responsibility.
PTINs are preparer-specific, and sharing them is not allowed. They expire on December 31 of the calendar year for which they are issued, with the cost to renew or obtain a PTIN being $19.75. This fee includes a user fee and a contractor fee and is non-refundable. To renew an existing PTIN, tax professionals can use the online renewal process on the IRS website, which takes about 15 minutes to complete. Alternatively, they can file Form W-12 by paper, but this process can take approximately six weeks to process.
First-time PTIN applicants can also apply for a PTIN online by visiting the Tax Pros section of the IRS website and selecting the “Renew or Register” button. Personal and business information, as well as credential information and Social Security Number, will be required during the application process. U.S. citizens with religious objections to obtaining an SSN and foreign preparers with a permanent non-U.S. address can also obtain a PTIN by following specific procedures outlined by the IRS in Rev. Proc. 2010-41.
It’s important not to confuse a PTIN with an Electronic Filing Identification Number (EFIN), as EFINs are issued to individuals or firms approved as authorized IRS e-file providers, whereas PTINs are only issued to individuals. There is no fee for obtaining an EFIN. Tax professionals can check the status of their PTIN in their online account main menu, with the information appearing in the information window at the top right. If the information does not appear, it could be that the PTIN has not been issued or linked to the online account.
Overall, as tax season concludes, tax professionals should take the opportunity to renew or obtain a PTIN in preparation for the next tax season. By following the correct procedures outlined by the IRS, tax professionals can ensure that they are compliant and ready to assist taxpayers with their tax returns and financial strategies for the upcoming year. Failure to renew or obtain a PTIN could result in penalties and disciplinary action by the IRS, so it’s essential to stay on top of these requirements to avoid any issues.
