Paid-Preparer Tax Identification Number (PTIN)

Staff Reports
by Staff Reports

IRS has proposed new requirements for tax return preparers, raising questions about how tax return preparers themselves, consumers, and tax firms and franchises are affected.

Who is affected by these proposed changes?

Anybody who is compensated for preparing or assisting in the preparation of a return, or who is required to sign, must obtain a Preparer Tax Identification Number or PTIN, and in most cases, pass a competency exam. One exception to this rule is an employee who prepares a return for their employer. In this case, the employee is not required to comply with the new requirements.

Will other tax professionals, such as attorneys and certified public accountants, that do not prepare and sign returns, need to obtain a PTIN?

These people do not need a PTIN unless they plan on preparing all or most of a return for compensation and/or sign a return on behalf of another.

What if a professional registers with the IRS, but does not pass the proper competency test within three years of implementation?

In this case, the IRS will send them a notice that their PTIN will be deactivated and their name removed from the database of registered professionals.