IRS Begins Tax Return Preparer Notifications

by Leroy Baker, Tax-News.com, New York

26 October 2010

The United States Internal Revenue Service (IRS) has begun notifying about 1m tax return preparers to remind them that they must renew their Preparer Tax Identification Numbers (PTIN) if they are still paid preparers.

The PTIN was created several years ago as a nine-digit number that tax return preparers could obtain from the IRS to use on tax returns instead of their social security numbers. Use of the PTIN will now be required on all federal returns prepared by paid tax return preparers, starting on January 1, 2011.

They can register immediately using a new PTIN sign-up system available through the IRS website. Preparers will need to create an account, complete the application and pay a USD64.25 fee, before getting their PTINs.

The IRS will be sending approximately 125,000 notification letters each week for eight weeks. The notifications are based on those tax return preparers who currently have PTINs.

Tax return preparers who received their PTINs prior to the new system launch on September 28, 2010, must register using the new sign-up system. Existing PTIN holders who register through the new system will generally be reassigned their same numbers.

The PTIN requirement is one of the main provisions in a new oversight programme to help regulate the tax preparation industry. Anyone paid to prepare all or substantially all of any federal tax return or claim for a refund must have a PTIN. The requirement applies to all tax return preparers, including those who are enrolled agents, certified public accountants and attorneys.

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