New Requirements for Tax Return Preparers: Frequently Asked Questions

Updated April 13, 2011

Tips for Using the Online PTIN System
New PTIN Requirements
Scenarios
Online PTIN System FAQS
Social Security Number Requirement
General
Fees
Preparer Designation
Other Credentials
Testing
Continuing Professional Education Requirements
Public Database


Tips for Using the Online PTIN System

  1. Remember your user ID and password - write it down somewhere - you cannot get back into your account without your user name and password.
  2. If the name of the first spouse contains a suffix (Jr, Sr, etc.), the IRS system likely identifies it as part of both spouse's last name. If authentication fails, try entering the last name with the suffix, i.e. Jane Doe Jr. The IRS intends to correct this issue in the future.
  3. Each individual must create their own account that includes a unique email address, user ID and password. This includes spouses and employees of the same organization.
  4. You will NOT need to enter your old PTIN into the online application. You may or may not get the same PTIN at the end of the sign-up process.

New PTIN Requirements

1. Who needs a Preparer Tax Identification Number (PTIN)? (revised 1/3/11)

A PTIN must be obtained by all tax return preparers who are compensated for preparing, or assisting in the preparation of, all or substantially all of any U.S. federal tax return, claim for refund, or other tax form submitted to the IRS except the following:

Form SS-4, Application for Employer Identification Number;
Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding;
Form SS-16, Certificate of Election of Coverage under FICA;
Form W-2 series of returns;
Form W-7, Application for IRS Individual Taxpayer Identification Number;
Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding;
Form 870, Waiver of Restrictions on Assessment and Collection of Deficiency in Tax and Acceptance of Overassessment;
Form 872, Consent to Extend the Time to Assess Tax;
Form 906, Closing Agreement On Final Determination Covering Specific Matters;
Form 1098 series;
Form 1099 series;
Form 2848, Power of Attorney and Declaration of Representative;
Form 3115, Application for Change in Accounting Method;
Form 4029, Application for Exemption From Social Security and Medicare Taxes and Waiver of Benefits;
Form 4361, Application for Exemption From Self-Employment Tax for Use by Ministers, Members of Religious Orders and Christian Science Practitioners;
Form 4419, Application for Filing Information Returns Electronically;
Form 5300, Application for Determination for Employee Benefit Plan;
Form 5307, Application for Determination for Adopters of Master or Prototype or Volume Submitter Plans;
Form 5310, Application for Determination for Terminating Plan;
Form 5500 series;
Form 8027, Employer's Annual Information Return of Tip Income and Allocated Tips;
Form 8288-A, Statement of Withholding on Dispositions by Foreign Persons of U.S. Real Property Interests;
Form 8288-B, Application for Withholding Certificate for Dispositions by Foreign Persons of U.S. Real Property Interests;
Form 8508, Request for Waiver From Filing Information Returns Electronically;
Form 8717, User Fee for Employee Plan Determination, Opinion, and Advisory Letter Request;
Form 8809, Application for Extension of Time to File Information Return;
Form 8821, Tax Information Authorization;
Form 8942, Application for Certification of Qualified Investments Eligible for Credits and Grants Under the Qualifying Therapeutic Discovery Project Program

Refer to the Scenarios section for additional guidance.

2. I already have a PTIN. Do I need to take any action? (revised 3/15/11)

Yes. All federal tax return preparers, including those who obtained a PTIN prior to Sept. 28, 2010, need to register in the new system. All preparers need to be registered in the new system and have a PTIN prior to filing any return after Dec. 31, 2010. As long as the IRS can validate the ownership of the existing PTIN, the same number will be reassigned once the appropriate information is provided and the user fee is paid.

3. Can multiple individuals or one office share one PTIN? (posted 8/11/10)

No, a PTIN is an individual preparer's number. Each preparer must obtain his or her own PTIN.

4. Can one individual obtain multiple PTINS? (posted 10/1/10)

No, an individual may only obtain one PTIN.

5. If I don't have a PTIN (new or renewed), can I still prepare returns? (revised 1/25/11)

No. You must wait until you submit an online or paper application, pay the fee, and obtain (or renew) a PTIN. Exception: Certain individuals who have made a good faith effort to timely obtain a PTIN but experienced processing issues are being advised they may prepare returns during the interim period while their applications are pending. These notifications are being issued on the online system to people who make four unsuccessful attempts to register and in writing (email or letter) to individuals who have timely submitted paper applications and payments. Refer to Notice 2011-11 for additional information.

6. Is there an age requirement for obtaining a PTIN? (posted 9/30/10)

Yes, applicants must be 18 years of age.

7. What penalties can be imposed against tax return preparers who have not obtained a PTIN? (posted 3/18/11)

Any individual who, for compensation, prepares, or assists in the preparation of, all or substantially all of a tax return or claim for refund after December 31, 2010 must have a PTIN.  Failure to do so could result in the imposition of Internal Revenue Code section 6695 penalties, injunction, referral for criminal investigation, or disciplinary action by the IRS Office of Professional Responsibility.

Exception: Certain individuals who have made a good faith effort to timely obtain a PTIN but experienced processing issues are being notified that they may prepare returns during the interim period while their applications are pending. These notifications are being issued on the online system to people who make four unsuccessful attempts to register and in writing (email or letter) to individuals who have timely submitted paper applications and payments. Refer to Notice 2011-11 for additional information.

8. What is the difference between a PTIN and an EFIN?  Does a preparer need both? (posted 3/18/11)

A Preparer Tax Identification Number (PTIN) is a number issued by the IRS to paid tax return preparers.  It is used as the tax return preparer’s identification number and, when applicable, must be placed in the Paid Preparer section of a tax return the tax return preparer prepared for compensation.

Any individual who, for compensation, prepares all or substantially all of a tax return or claim for refund needs a PTIN.  (See PTIN Requirements and Scenarios for additional guidance.)  There is an annual fee of $64.25 for a PTIN and applicants must meet various suitability requirements.

An Electronic Filing Identification Number (EFIN) is a number issued by the IRS to individuals or firms that have been approved as authorized IRS e-file providers.  It is included with all electronic return data transmitted to the IRS.

Paid preparers who reasonably expect to file 100 or more Forms 1040, 1040A, 1040EZ, or 1041 during 2011 are required to electronically file their clients’ returns.  They (or their firm) need an EFIN, as do preparers who are not required to e-file but voluntarily desire to participate.  (See New e-file Rules for 2011 for additional guidance.)  There is no fee for an EFIN, but applicants must meet various suitability requirements.

Preparer Tax Identification Numbers are issued to individuals.  Electronic Filing Identification Numbers are issued to individuals or firms.  Most preparers need both.


Scenarios

1. I am a tax return preparer, and I have a PTIN. My firm employs a bookkeeper. She gathers client receipts and invoices, and organizes and records all information for me. Although I use the information that our bookkeeper has compiled, I prepare my clients' tax returns and make all substantive determinations that go into computing the tax liability. Does my bookkeeper need to have a PTIN? (posted 9/28/10)

No, she is not a tax return preparer, and is not required to have a PTIN.

2. I am a tax return preparer, and I have a PTIN. Every tax filing season I hire two paid interns from the accounting program at a local college to help me during the busy season. The interns perform data entry from the tax organizer that my clients fill out, and assemble the documentation that the clients have submitted. Where clients have submitted incomplete information, or more information is needed, the interns may call clients to gather information missing from the tax organizer, but they are not allowed to provide advice or answer tax law questions. I prepare and sign all my clients' returns. Do my interns need to have a PTIN? (posted 9/28/10)

No, the interns are not tax return preparers, and are not required to have a PTIN.

3. Same facts as above, but in order to help my interns get exposure to the tax system, I allow them to work with clients who have very simple tax situations, and prepare the Form 1040-EZ. I review the forms carefully, and sign them. Are my interns required to have PTINs? (posted 9/28/10)

Yes, the interns are tax return preparers and are required to have a PTIN, whether or not they sign the returns.

4. I am a tax return preparer, and I have a PTIN. I have an administrative assistant in the office who also performs data entry during tax filing season. At times, clients call and provide him with information, which he records in the system. Using the data he has entered, I meet with my clients and provide advice as needed. I then prepare and sign their returns. Is my administrative assistant required to have a PTIN? (posted 9/28/10)

No, the administrative assistant is not a tax return preparer, and is not required to have a PTIN.

5. I am a retired tax professional, and I volunteer during the tax filing season. I volunteer at a VITA site, where I prepare individual tax returns for lower-income individuals for no compensation. Do I need to have a PTIN? (posted 9/28/10)

No, you are not a tax return preparer and you are not required to have a PTIN.

6. I run a small tax return preparation business that is heavily software-based. I employ four associates who sit with taxpayers and walk through a step-by-step software program that uses an "interview" process that results in a draft tax return. I check and sign the returns, and I have a PTIN. Do my four associates need to have a PTIN? (posted 9/28/10)

You will need to perform additional analysis to determine whether your four associates must have a PTIN. The answer depends on the specific circumstances of your firm. In general, if individuals prepare all or substantially all of a tax return, including making determinations that affect tax liability, they must have a PTIN.

7. I am a reporting agent who prepares Forms 94X series returns for my clients for compensation. I do not exercise any discretion or independent judgment on my client's underlying tax positions and I do not render tax advice to any of my clients. Do I need a PTIN? (revised 1/3/11)

No. The PTIN regulations incorporate the carve-out from the definition of tax return preparer in Treasury Regulation section 301.7701-15(f) for individuals who provide only typing, reproduction, or other mechanical assistance in the preparation of a return or claim for refund. Example one under Treasury Regulation section 301.7701-15(f)(6) provides that reporting agents who do not exercise any discretion or independent judgment on the client's underlying tax positions and who do not render tax advice to any clients are carved-out under this exception and, therefore, are not tax return preparers.

8. I am a reporting agent who prepares Forms 94X series returns for my clients for compensation. On occasion, my clients ask me for assistance with issues such as determining whether their workers are employees or independent contractors for federal tax purposes. Do I need a PTIN? (revised 1/3/11)

Yes. The PTIN regulations require all tax return preparers who are compensated for preparing, or assisting in the preparation of, all or substantially all of a tax return or claim for refund of tax to register and obtain a PTIN. The carve-out from the definition of tax return preparer for individuals who provide only typing, reproduction, or other mechanical assistance in the preparation of a return or claim for refund does not apply to reporting agents who render tax advice to any client (example two under Treasury Regulation section 301.7701-15(f)(6)).

9. I am a retirement plan administrator who prepares Forms 5500 and the accompanying schedules for my clients. I also prepare Forms 8955-SSA and Form 5558 for my clients. While the Form 5500 series returns are included in the list of forms exempted from the PTIN requirements in Notice 2011-6, the Forms 8955-SSA and Forms 5558 are not included in that list. Am I required to obtain a PTIN? (posted 3/4/11)

No. The Form 8955-SSA, Annual Registration Statement Identifying Separated Participants With Deferred Vested Participants, and Form 5558, Application for Extension of Time to File Certain Employee Plan Returns, are, for purposes of Notice 2011-6, part of the "Form 5500 series" of tax returns inasmuch as these forms are prepared either in conjunction with the filing of a retirement plan's Form 5500 filing or to request an extension of time to file a Form 5500 series tax return.

10. Is an attorney or a certified public accountant required to obtain a PTIN if the attorney or certified public accountant only advises a client regarding an issue that is reflected on a claim for refund? (posted 3/4/11)

An attorney or certified public accountant is required to obtain a PTIN if the attorney or certified public accountant prepares, or assists in preparing, all or substantially all of a return or claim for refund. Under the authority of section 1.6109-2(h), however, an attorney or certified public accountant will not be required to obtain a PTIN if the attorney or certified public accountant only advises a client regarding an issue that is reflected on a claim for refund and neither the attorney or certified public accountant nor any person in the firm of the attorney or certified public accountant signs or is required to sign the claim for refund under Treasury Regulation sections 301.7701-15(b)(1) and 1.6695-1(b). The attorney or certified public accountant in question is still a nonsigning tax return preparer subject to penalty under section 6694 if the attorney or certified public accountant has prepared all or a substantial portion of the claim for refund within the meaning of Treasury Regulation section 301.7701-15(b)(3).


Online PTIN System

1. What format should I use when entering the address from my most recent Form 1040 return? (revised 11/1/2010)

Enter your address exactly as it appears on your most recent tax return except for punctuation. Punctuation should be omitted.

2. Why couldn't you authenticate my identity? (revised 11/10/2010)

For security purposes, the IRS verifies that information on your PTIN application matches information about you on other IRS systems. If any of the information is missing or does not match (including first and last name, social security number, date of birth, and the address and filing status from your most recent Form 1040 income tax return), a PTIN cannot be issued.

Only 4 attempts are allowed within a 24-hour period, so follow these guidelines:

  • Your name, social security number, filing status, and address from your last filed tax return and your date of birth must match exactly.
  • If you filed your most recent tax return within the last six weeks you must use the prior year's return information for authentication.
  • If you filed an amended return last year, be sure to use the information from your original return.
  • When entering your address remove all punctuation. For example, if you have a PO BOX do not include the periods between the "P" and the "O".
  • Domestic addresses only require two address lines. Do not enter any information in the "address line 3" field unless you live outside of the United States.
  • If you get an error message stating your information could not be verified, check the information that IRS has on record by calling the Practitioner Priority Service at 1-866-860-4259. Ask for your information exactly as it appears in the IRS system, including punctuation and abbreviations.

3. Why don't I have to enter my current PTIN? (posted 9/28/2010)

After you enter information to authenticate your identity, the system will search for an existing PTIN assigned to a matching name, social security, and date of birth. If matching information is located, you will be assigned the same PTIN. If it does not match, you will get a new PTIN.

4. What name should I use on the PTIN application? (posted 9/28/2010)

The name you should use when applying for a PTIN is the name you used on your most recent Form 1040 income tax return.

5. I filed a married filing jointly return, but my last name is different than the primary taxpayer on the return. What should I do? (revised 12/6/10)

Please log-in and complete your application with your information exactly as it appears on your previous year's income tax return.

6. The name I used on my previous year’s income tax return and/or my PTIN application is no longer my name. What should I do? (revised 3/24/11)

To help authenticate your identity, the name you should use when applying for a PTIN needs to be the name you used on your most recent Form 1040 income tax return.  After you obtain a PTIN, you must submit your name change request in writing along with a notarized copy of documentation supporting the name change (e.g., marriage certificate, social security card, or divorce decree) to:

IRS Tax Professional PTIN Processing Center
104 Brookeridge Drive #5000
Waterloo, IA 50702

If the name change is due to a typographical error, please contact the IRS Tax Professional PTIN Information Line.

7. Can my organization use one email address to create accounts for all of its employees? (posted 10/6/2010)

No. Every PTIN holder must have their own email address and account. Do not use a temporary email account. Not only will you receive your temporary password using the email account, you will periodically receive email correspondence from the system with general preparer-related information, updates and program requirements. This information may be specific to the PTIN holder.

8. What do I do if I forget my password? (posted 10/6/2010)

Go to www.irs.gov/taxpros to access the PTIN system. On the PTIN system, click on "Forgot your password?" under "Existing Users." You will receive a new temporary password via email. Then, return to the PTIN system and use your user ID and temporary password to log in. You will be prompted to create a new permanent password.

9. What if I can't find my temporary password in my email box? (revised 10/1/2010)

Check your junk or spam folder. If the email is not received in your regular or junk folder, you should update your security filter to allow emails from TaxPro_PTIN@irs.gov. Then to generate a new temporary email password, go back into the system and click on "Forgot your password? Click here."

10. What do I do if I forget my user ID? (updated 10/15/2010)

Your user ID is generally your email address, unless you opted to specify a different user ID. When creating your account, be sure to keep your user ID and password in a safe place. If you are unable to recover your user ID, please contact the IRS Tax Professional PTIN Information Line.

11. I have a social security number, but have never filed a federal tax return.  Am I able to obtain a PTIN?  (revised 3/29/2011)

If you are requesting a PTIN and have:

  • Never filed a U.S. income tax return, or   
  • Not filed a U.S. income tax return in the past four years 

Then you must complete and submit a paper W-12 PTIN application along with a copy of your Social Security Card.  Additionally, you are required to submit one other document that contains a photo ID.  The list of acceptable supporting documents is noted below.  All documents must be current and must verify your name.  If you submit copies of documents that display information on both sides, copies of both the front and back must be attached to the Form W-12.  Send the completed W-12 application, copy of your SS Card and the other supporting documentation to the address on the Form W-12.  If a photo ID is not included with your application, your application will be rejected.

  • Social Security Card (required) 
  • Passport/Passport Card 
  • U.S. Driver’s License 
  • U.S. State ID Card  
  • U.S. Military ID Card   
  • Foreign Military ID Card 

*Note:  The IRS will accept original documents or certified/notarized copies of documents.  Original documents will be returned to the preparer at the mailing address shown on the Form W-12.  Although the IRS will accept original documents, it is recommended that preparers submit copies of original documents in accordance with either of the requirements outlined below:

  • The copies are certified by the issuing agency or official custodian of the original record.  All certifications must stay attached to the copies of the documents when they are sent to the IRS. 
  • The copies are notarized by a U.S. notary public or foreign notary legally authorized within his or her local jurisdiction to certify that each document is a true copy of the original.  To do this, the notary must see the valid, unaltered, original documents and verify that the copies conform to the original.  Preparers must send the copy that bears the mark (stamp, signature, etc.) of the notary.  Photocopies or faxes of notarized documents are not acceptable.

12. I have a social security number, but have not filed an income tax return with the IRS.  My federal income tax returns were filed with the Departamento de Hacienda (Puerto Rico).  How do I obtain a PTIN? (posted 3/29/2011)

A Puerto Rican resident who has never filed a U.S. individual income tax return, must submit a paper Form W-12 PTIN application.  Include the following:

  • Check or money order for $64.25 (make check out to IRS Tax Professional PTIN Processing Center) 
  • Hacienda tax information on Line 5 of the Form W-12

In order to ensure efficient processing, please note:

  • Information on lines 1, 3, and 5 of Form W-12 must exactly match SSA, IRS and/or Hacienda information. If it doesn't match, the application will be rejected and notarized supporting documentation will be required as outlined in FAQ 11.

Once a new PTIN is assigned, it is not possible to have a prior PTIN re-issued. Be sure to use the newly assigned PTIN on all returns and not the previous PTIN.

13. Do I have to apply for a PTIN online? (posted 9/28/2010)

No, you may submit a paper Form W-12, IRS Paid Preparer Tax Identification Number (PTIN) Application. The paper application will take 4-6 weeks to process.

14. I sent in a paper W-12 and my check has not been cashed. What should I do? (revised 3/10/11)
 
Unlike tax returns, we generally will not process your payment until a PTIN has been issued. You will receive a letter in the mail when your application is processed. If you included an email address on your W-12, you will be notified via email when your application is processed.

If you have a paper Form W-12 pending, you may still opt to go ahead and register online at any time.  Your paper form and payment will be returned to you.

Exception:  Checks with Forms 8945 and 8946 are cashed upon receipt.

15. Do I have to pay the application fee online? (posted 9/28/2010)

Yes, you must pay the fee online if you use the online system. If you prefer to send a check or money order, you will need to apply using a paper Form W-12, IRS Paid Preparer Tax Identification Number (PTIN) Application. The paper application will take 4-6 weeks to process.

16. Can one payment be sent with multiple paper Forms W-12 submitted together? (posted 9/30/10)

No, processing requirements make it necessary for separate payments to accompany each application.

17. I need to update my PTIN account information (either I moved, obtained a new tax professional credential, changed my place of business, have to update my email address, etc.), how do I do this? (posted 12/6/10)

At this time, you must call the IRS Tax Professional PTIN Information Line in order to make any updates to your account. A customer account representative will update your information over the phone.

18. Who can I contact for help in filling out the application? (posted 9/28/2010)

The IRS Tax Professional PTIN Information Line is available to provide assistance during regular business hours on Monday through Friday, 8:00 a.m. to 5:00 p.m. Central:

  • Toll-free: 877-613-PTIN (7846)
  • TTY: 877-613-3686
  • International: +1 319-464-3272

Social Security Number Requirement

1. Is a social security number required to obtain a PTIN? (revised 4/13/11)

Individuals generally are required to provide their social security numbers when they obtain a PTIN.  However, U.S. citizens who have a conscientious objection to obtaining a social security number for religious reasons and foreign persons who are not eligible to obtain a social security number and have a permanent non-U.S. address may obtain a PTIN without a social security number.  These individuals are required to provide supplemental documentation to verify their identity and substantiate their eligibility for a PTIN under these specific exceptions.  See questions 2 and 3 below for additional guidance. 

Individuals who have an Individual Taxpayer Identification Number (ITIN) are not eligible for a PTIN unless they are foreign persons with a permanent non-U.S. address, and can provide documentation to support that status.

2. How do U.S. citizens without a social security number due to a conscientious objection for religious reasons obtain a PTIN? (revised 4/13/11)

U.S. citizens who have a conscientious objection to obtaining a social security number for religious reasons must complete Form W-12, IRS Paid Preparer Tax Identification Number (PTIN) Application, either online or on paper, and a paper Form 8945, PTIN Supplemental Application For U.S. Citizens Without a Social Security Number Due To Conscientious Religious Objection. 

Documentation to substantiate identity, U.S. citizenship, and status as a member of a recognized religious group must accompany the Form 8945.  Documentation requirements and mailing information are included in the Form 8945 instructions. An online Form W-12 combined with a paper Form 8945 will take 2-4 weeks to process versus an all paper application which will take 4-6 weeks.

3. How do foreign preparers without a social security number obtain a PTIN? (updated 12/10/10)

A foreign preparer who does not have and is not eligible to obtain a social security number and is neither a citizen of the U.S. nor a resident alien of the U.S. as defined in section 7701(b)(1)(A) will need to complete the Form W-12, IRS Paid Preparer Tax Identification Number (PTIN) Application, either online or on paper, and a paper Form 8946, PTIN Supplemental Application For Foreign Persons Without a Social Security Number. Only preparers that have a foreign (non-U.S.) address may file this form.

Individuals who have an Individual Taxpayer Identification Number (ITIN) are not eligible for a PTIN unless they are foreign persons with a permanent non-U.S. address.

Documentation to substantiate identity and eligibility must accompany the Form 8946. Documentation requirements and mailing information are included in the Form 8946 instructions.

An online Form W-12 combined with a paper Form 8946 will take 2-4 weeks to process versus an all paper application which will take 4-6 weeks.

4. If a foreign preparer or U.S. citizen without a social security number due to a conscientious religious objection experiences a delay in obtaining a PTIN due to the additional documentation that must be obtained and provided, can the person still prepare returns after Jan. 1, 2011? (posted 10/26/10)

While these tax return preparers are expected to initiate action to timely obtain a PTIN, the IRS recognizes that these individuals must complete multiple steps under the new procedures to obtain a PTIN, and that, in some cases, circumstances beyond their control may delay the process.

For purposes of the 2011 filing season, those preparers who complete the on-line application or submit a completed paper Form W-12 by the later of (1) January 31, 2011, or (2) 10 days after the first day on which they prepare all or substantially all of a U.S. tax return for compensation and they submit a completed PTIN supplemental application, Form 8945 or Form 8946, including any required additional documentation within 60 days after completion of the online application or submission of the paper Form W-12 will be considered to have complied with the requirement to obtain a PTIN. The applicable PTIN user fee must be submitted with the online application or paper Form W-12.

These individuals may prepare and sign U.S. tax returns as a paid preparer without furnishing a PTIN or other identifying number until Oct. 31, 2011. See Rev. Proc. 2010-41 for more information.


General

1. Does the PTIN requirement apply to individuals who only prepare payroll or other non-1040 series returns? (revised 9/28/10)

Yes. All paid tax return preparers are required to obtain a PTIN.

2. Is the IRS conducting fingerprint checks as part of the PTIN application process? (posted 10/1/10)

The IRS is not currently conducting fingerprint checks as part of the PTIN application process, but is considering them for certain applicants in the future. There is a current requirement for all applications to include an explanation of any felony convictions in the past 10 years.

3. What are the technical requirements in order to access the online PTIN system? (posted 9/28/2010)

You must have access to a computer with internet service. There are no additional minimum technical requirements to use the online PTIN application. However, the application may function at reduced speed if you have limited memory.

4. The filing status of my last return was "Married Filing Jointly". Are there any special instructions for completing my PTIN application and authenticating my identity? (revised 1/4/11)

First, if both spouses are applying for PTINs, each must create a user account under different email addresses and file a separate PTIN application. Then you must each enter your own information on separate applications (your name, your social security number and your address). In addition, when asked to enter the information off of your previous year's tax return, be careful to enter the exact information, including your name, as it was shown on the return.

Tip: If the name of the first spouse contains a suffix (Jr., Sr. etc.), the IRS system likely identifies it as part of both spouse's last name. If authentication fails, try entering the last name with the suffix, i.e. Jane Doe Jr. The IRS intends to correct this issue in the future.

5. When paying the application fee online, does the payment card have to be in my name? (posted 9/28/2010)

No. There are separate entries for the card information, including the name, zip code, and security code. The information will be validated against the credit card number.

6. Can I exit the PTIN application once I start? (posted 9/28/2010)

Yes, you may exit your PTIN application at any time by pressing the cancel button. Your incomplete application will appear the next time you login to the IRS Tax Professional PTIN Sign-up System.

7. Can I delete my PTIN account? (posted 10/6/2010)

No. Once you have created an online PTIN account with a username and password, you cannot delete that portal account. A portal account is different from your PTIN application - the portal account is what you must create in order to start a PTIN application.

You can delete an incomplete PTIN application until such time as the application is submitted. Once you hit the "Submit" button on your application and attest that the information is true and correct, you are no longer able to delete it.

8. Can you help me find my professional credential numbers? (posted 9/28/2010)

Enrolled agents can contact the IRS Office of Professional Responsibility at (202) 927-3397.

Certified Public Accountants can find contact information for all state boards of accountancy at www.nasba.org.

Attorneys can find contact information for all state bar associations at www.abanet.org.

9. Can you define tax compliance? (posted 10/15/2010)

All PTIN applicants must attest they are compliant with their personal and business tax obligations, or provide an explanation if they are not.

A person is in tax compliance if 1) all returns that are due have been filed (or an extension requested) and 2) all taxes that are due have been paid (or acceptable payment arrangements have been established).

10. Will bankruptcy affect my ability to practice? (posted 9/28/2010)

Bankruptcy generally will not affect a PTIN application. A balance due account in bankruptcy status will not result in a preparer failing the tax compliance test. But, for an account to be in bankruptcy status, the taxpayer must have included the IRS debt in the bankruptcy filing.

11. What do you mean by "provisional PTIN"? (posted 9/28/2010)

Provisional PTINs are issued for three reasons: 1) The applicant is subject to testing requirements which have not yet been satisfied, 2) The applicant has indicated he/she is not in compliance with their federal tax responsibilities, and/or 3) The applicant has indicated he/she has been convicted of a felony in the past 10 years. The provisional status is temporary until the condition is resolved or reviewed and cleared.

12. What online payment methods are available? (posted 9/28/2010)

Payment options include credit card (Visa, MasterCard, Discover), debit card, or E-Check.

13. Why did I receive a postcard in the mail about my PTIN account? (posted 10/15/2010)

You received the postcard as a follow-up security measure to ensure you are aware an online PTIN account was created for you. If you believe someone inappropriately created an account on your behalf, contact the IRS Tax Professional PTIN Line to report it. Otherwise, no action is necessary.

14. When multiple paid preparers are involved in preparation and/or review of a return, who is required to sign the return? (posted 8/11/10)

Existing Treasury regulations under sections 1.6695-1(b) and 301.7701-15(b)(1) provide that a signing tax return preparer is the individual tax return preparer who has the primary responsibility for the overall accuracy of the preparation of a return. The new requirements requiring all preparers to register and obtain a Preparer Tax Identification Number (PTIN) do not change the existing rules regarding who is the signing tax return preparer.

15. Will non-signing preparers have to be disclosed on each return prepared even if another preparer reviews and signs it? (posted 8/11/10)

No, at least initially, there is no plan to expand the paid preparer section of the return. The name of any non-signing preparer will not be disclosed on the return, but they will still be required to have a PTIN and meet competency testing and continuing education requirements as applicable.

16. If an employee of a business prepares the business' tax returns as part of their job responsibilities, do the regulations affect them? (revised 9/28/10)

No. An employee who prepares his employer's returns is not required to sign as a paid preparer. Accordingly, unless the employee prepares other federal tax returns for compensation, he or she is not required to register and obtain a PTIN.


Fees

1. Enrolled agents currently pay $125 for enrollment and renewal. Attorneys and certified public accountants pay similar fees to their oversight organizations. Will the fee for obtaining a PTIN be applicable to all enrolled agents, attorneys and CPAs in addition to their other fees? (revised 12/10/10)

Yes. All paid tax return preparers will have to pay a fee to obtain and renew their PTINs. This fee is in addition to any fee that paid tax return preparers must pay for any other certifications or licenses they hold. Because attorneys, CPAs and enrolled agents are exempt from testing, they will not be required to pay the separate testing fee.

The IRS has proposed reducing the enrolled agent registration and renewal fee to $30. Individuals who have recently successfully completed the special enrollment examination may submit an enrolled agent application, but the current user fee of $125 must be paid until final regulations are published. Or these individuals may choose to delay applying for enrollment until the user fee is reduced. Individuals who delay applying for enrollment may not practice before the IRS until the application is submitted and the Office of Professional Responsibility has granted enrollment.

Also until the fee change is official, the current renewal period for those with identification numbers ending in 4, 5, or 6 has been delayed until further notice.

2. What is the amount of the fee for obtaining a PTIN (if I don't already have one) or renewing an existing PTIN ( if I already have one)? (revised 9/28/10)

The annual fee is $64.25 per individual and is the same regardless of whether you are obtaining a PTIN or re-newing an existing PTIN. The amount of the fee may change in future years as the actual program costs are periodically reevaluated.

3. How was the fee amount determined? (posted 8/19/10)

The fee is based on two underlying costs. The IRS will collect $50 per person to pay for outreach, technology, and compliance efforts associated with the new program. A third-party vendor will receive $14.25 per person to operate the online system and provide customer support.

User fees are directed by the Office of Management and Budget (OMB) to be charged by agencies to recover the cost of services that convey special benefits beyond those available to the general public, such as the authority to prepare federal tax returns for compensation.

4. Does the IRS refund any PTIN payments? (posted 1/26/11)

Generally no, except for certain unusual situations:

  • Multiple payments made for the same person for the same year. To request a refund, contact the PTIN help line at 1-877-613-7846.
  • PTIN obtained prior to issuance of guidance clarifying a PTIN was not necessary for the preparer's situation. i.e. An individual who only prepares Forms 5500, W-2, 1099, etc. To request a refund and cancellation of the PTIN, submit a signed, written explanation to IRS Tax Professional PTIN Processing Center, 104 Brookeridge Dr. #5000, Waterloo, IA 50702. Allow six weeks for a reply.
  • Other unusual situations where the payer believes a refund should be considered. To request a refund, submit a signed explanation to IRS Tax Professional PTIN Processing Center, 104 Brookeridge Dr. #5000, Waterloo, IA 50702. Allow six weeks for a reply.

Preparer Designation

1. Will there be a distinction between enrolled agents and the new category of preparers who will be required to take the new competency test? (posted 1/22/10)

Yes. The practice of enrolled agents before the IRS will not be limited. The practice of the new category of preparers will be limited to preparing tax returns for compensation and representing taxpayers in Examination when the return under examination was a return that they prepared.

2. Will there be a new designation for preparers who pass the competency test? (revised 9/28/10)

Yes. Once an individual possesses a valid PTIN and passes an IRS competency test, they will become a Registered Tax Return Preparer.

3. How will the conditions to practice before the IRS be changed by the new regulations? Currently tax practitioners that are not attorneys, certified public accountants, or enrolled agents have limited practice before the IRS. (posted 1/22/10)

The new category of preparers who pass the competency test will have the same limited practice rights that an unenrolled preparer currently has.


Other Credentials

1. Do Accredited Council of Accountancy for Taxation (ACAT) credential holders have to obtain a PTIN and pass the IRS return preparer examination? (revised 9/28/10)

Yes, ACAT credential holders who are paid to prepare all or substantially all of a federal tax return will need to obtain a PTIN. They will also need to pass the competency exam unless they are also attorneys, certified public accountants, or enrolled agents. As for continuing professional education, they will be subject to the new requirements unless they are also attorneys, CPAs, enrolled agents, enrolled actuaries or enrolled retirement plan agents.

2. How will the new regulations affect registered or licensed public accountants? Would they have to test? (revised 8/11/10)

In many states, a registered or licensed public accountant (LPA) has the same rights and privileges as a certified public accountant. Thus, an LPA in those states is eligible to practice before the IRS by virtue of their public accountant's license and these individuals will not be required to pass the IRS' return preparer examination or satisfy the CPE requirements for tax return preparers.

The following is a non-exclusive list of states where a LPA has the same rights and privileges as a CPA: Alabama, Alaska, Arkansas, California, Colorado (Registered Public Accountants only), Connecticut, Hawaii, Idaho, Maine, Montana, New Hampshire, New Jersey, New York, North Dakota, Ohio, Oklahoma, Pennsylvania, Rhode Island, South Dakota, Tennessee, Vermont, and West Virginia.

LPAs in the following states do not have the same rights and privileges as a certified public accountant and, therefore, will be required to pass the IRS' return preparer examination and satisfy the CPE requirements for tax return preparers to prepare any federal tax return for compensation (unless the LPA is an attorney or enrolled agent): Delaware, Illinois, Iowa, Kansas, Michigan, Oregon (unless the person qualified for, and applied to take, the Uniform CPA examination before Jan. 1, 2002), and South Carolina

LPAs in other states should review the laws of the state in which they are licensed to determine whether they have the same rights and privileges as a certified public accountant.

3. In Minnesota, we have Registered Public Accountants. These individuals are governed by the Minnesota Board of Accountancy, must register with the Board, pay a fee and have continuing education requirements and ethics requirements. Will they have to test? (posted 1/22/10)

In general, a registered (or licensed) public accountant may practice before the IRS if the registered (or licensed) public accountant has the same rights and privileges as a certified public accountant under state law. Although the IRS has reviewed the laws of 29 states to determine if the registered (or licensed) public accountants in those states have the same rights and privileges as a CPA, Minnesota is not one of those 29 states. Accordingly, the registered public accountants in Minnesota should review their own state laws to determine whether they have the same rights and privileges as a CPA. until the Office of Professional Responsibility has an opportunity to formally consider whether Minnesota's registered public accountants are qualified to practice as CPAs.

4. Will preparers who are registered by the states of California or Oregon (California Tax Return Preparers and Oregon Licensed Tax Preparers/Consultants) be exempt from testing and continuing education requirements? (posted 1/22/10)

Only attorneys, certified public accountants and enrolled agents will be exempt from testing and continuing education requirements.

5. How are enrolled retirement plan agents and enrolled actuaries affected by the recommendations? (posted 7/22/10)

Enrolled retirement plan agents and enrolled actuaries must obtain a PTIN if they are compensated for preparing, or assisting in the preparation of, all or substantially all of a federal tax return or claim for refund. But they will be exempt from the competency test requirement if they only prepare returns within the limited practice areas of these groups.

6. Are individuals who are active attorneys, certified public accountants or enrolled agents be required to obtain a PTIN if they do not prepare all or substantially all of any tax return? (revised 9/28/10)

Attorneys, certified public accountants and enrolled agents do not need to obtain a PTIN unless they prepare for compensation all or substantially all of a federal tax return or claim for refund.

7. Are e-file transmitters or intermediate service providers that do not prepare returns subject to the new requirements? (revised 9/28/10)

No. E-file providers that assist in the formatting and transmission of tax returns electronically, but do not prepare all or substantially all of a federal tax return or claim for refund for compensation, are not the focus of the new regulations.


Testing

1. What is the testing proposal? (revised 1/4/11)

The IRS has proposed that certain individuals will have to pass a competency test to officially become a Registered Tax Return Preparer. The IRS expects testing to begin in mid-2011.

Individuals exempt from testing will include:

  • Attorneys, certified public accountants, and enrolled agents
  • Certain supervised preparers
  • Those who prepare no Form 1040 series returns

Tax return preparers who are required to test and have PTINs before testing becomes available will have until Dec. 31, 2013, to pass the competency test. After testing becomes available, new non-exempt tax return preparers will be required to pass the competency test before they can obtain a PTIN.

Enrolled actuaries and enrolled retirement plan agents will also be exempt if they only prepare returns within their limited practice areas. More guidance on testing and the testing fee will be available in spring 2011.

2. Who are considered supervised preparers? (revised 1/6/11)

In general, supervised preparers are those who do not sign returns but are employed by attorney or CPA firms or other recognized firms at least 80 percent owned by attorneys, CPAs, or enrolled agents, and who are supervised by an attorney, CPA or enrolled agent.

These individuals must still obtain a PTIN and certify on the application they are supervised and provide the supervising individual's PTIN. The capability for a preparer to specify themselves as a supervised preparer and provide the PTIN of their supervisor will be added to the PTIN system later this year.

Additional guidance on supervised preparers is available in Notice 2011-6.

3. Will paid tax return preparers be limited to preparing only the types of tax returns that they have successfully tested on? (revised 1/4/11)

Yes, for Form 1040 series tax returns. Preparation of Form 1040 series returns will be limited to preparers who have successfully passed the IRS competency examination or are an attorney, CPA, enrolled agent, or supervised preparer.

4. What language(s) will the competency test be available in? (revised 4/22/10)

At least initially, the test will only be available in English.

5. Will the testing be done by the same firm that administers the enrolled agent exam? Or will IRS be doing the testing? (posted 1/22/10)

The testing likely will be done by an external vendor(s). The vendor(s) is unknown at this time.

6. Will a CPA who keeps his or her license current but is considered inactive be subject to testing? (posted 1/22/10)

Yes. Only attorneys, certified public accountants, or enrolled agents who are active and in good standing with their respective licensing agencies are exempt from competency testing.

7. Will the tests be open book or resource assisted? (revised 7/20/10)

Certain resources will be permitted and provided at the testing center. Stay tuned to the IRS.gov Tax Professionals page for information on this issue.

8. The two competency tests are described as covering: 1) Wage & non business 1040 and 2) Wage and Small Business 1040. What does small business include? And how would this impact those who prepare other business returns? (revised 7/20/10)

For competency testing purposes, small business will include Form 1040 Schedules C, E and F and various other 1040 related forms. Appendix I of the Return Preparer Review report contains a detailed list.

Additional guidance for individuals who do not prepare any Form 1040 series returns and who are not an attorney, CPA, or enrolled agent will be provided when testing is implemented.

The IRS plans to add a third test with regard to business tax rules after the three-year implementation phase is completed.

9. Will testing apply to individuals who only prepare non-1040 series returns? (revised 1/3/11)

The initial test(s) will be for individuals who prepare Form 1040 series returns. Individuals who do not prepare any Form 1040 series returns will be exempt from testing until such time as the IRS decides to expand testing to other types of returns.

10. What is the required percentage to pass the competency test? (posted 1/22/10)

This has not been determined. Stay tuned to the IRS.gov Tax Professionals page for information on this issue.

11. What will happen to an unenrolled return preparer who obtains a PTIN but does not pass the competency test by Dec. 31, 2013? (revised 9/28/10)

The IRS will contact them proposing to deactivate their PTIN and remove them from the list of registered preparers, as well as, explaining the appeals process.

12. When will testing begin? What is the deadline for passing? How many attempts will I have to pass? How long will it be? What is the cost? (posted 8/11/10)

Testing is expected by begin in mid-2011. Those individuals who have a valid PTIN when testing begins will have until Dec. 31, 2013, to pass the test and may take the test an unlimited number of times to pass it. There will be a fee to take the test and that fee will be due each time the individual attempts to pass the test. The IRS has not determined the amount of the fee, the length of the test, and other test details at this time. For the latest information on this issue, stay tuned to the Tax Professionals page on IRS.gov.

13. Will the test be offered online or will I have to go to a designated location? (posted 8/11/10)

Those who need to test will need to physically go to a testing site, authenticate their identity, and take the test in person at the testing site. More information about testing, including test locations and test procedures, will be posted on the Tax Professionals page on IRS.gov when it becomes available.

14. Will the IRS offer study courses prior to testing? (posted 8/11/10)

The IRS will provide basic information about the forms and schedules that will be covered by the return preparer examination, but will not offer any preparation courses. Commercial businesses or individuals may offer preparation courses.


CPE Requirements

1. What is the continuing education proposal? (revised 1/4/11)

The IRS has proposed that Registered Tax Return Preparers will be required to complete continuing education annually. The annual continuing education requirement is expected to include 3 hours of federal tax law updates, 2 hours of ethics, and 10 hours of other federal tax law.

Individuals exempt from continuing education requirements will include:

  • Attorneys, certified public accountants, and enrolled agents
  • Certain supervised preparers
  • Those who prepare no Form 1040 series returns

The beginning date for continuing education has not been determined and obtaining a PTIN through the new system does not trigger any new continuing education requirement. Once the continuing education requirement begins, affected preparers will have a full twelve months to meet their first year's requirement.

As part of the new oversight program, the IRS is revamping the continuing education approval process. Regulations issued in August 2010 outline the proposed modifications for providers of continuing education programs. Additional information will be available at a future date.

2. What is the process for becoming a qualified sponsor for continuing education? (revised 12/10/10)

The only continuing education for which providers may currently seek approval is for programs intended for enrolled agents and enrolled retirement plan agents for 2011. All existing provisions of Circular 230 with respect to continuing education requirements and program providers for these enrolled professionals remain in effect.

Circular 230 section 10.6(g) outlines the current process. To qualify as a sponsor, a program presenter must:

  • Be an accredited educational institution;
  • Be recognized for continuing education purposes by the licensing body of any state, territory, or possession of the United States, including a Commonwealth, or the District of Columbia;
  • Be recognized by the Director of Office of Professional Responsibility as a professional organization or society whose programs include offering continuing professional education opportunities; or
  • File a sponsor agreement with the Director of the Office of Professional Responsibility and obtain approval of the program as a qualified continuing education program (Form 8498, Program Sponsor Agreement for Continuing Education for Enrolled Agents).

As part of the new oversight program, the IRS is revamping the continuing education approval process. Regulations issued in August 2010 outline the proposed modifications for providers of continuing education programs. Additional information will be available at a future date.

3. Who should I contact if I have questions about the current process for becoming a qualified sponsor for continuing education? (posted 12/10/10)

The Office of Professional Responsibility continues to handle the administration of the provider application, approval, and oversight procedures (including processing of Forms 8498, Program Sponsor Agreement for Continuing Education). Questions about sponsor applications, renewals, approvals and procedures should be addressed to OPR at opr@irs.gov or 202-927-3397.

The IRS will provide more information about provider oversight, administration and procedures for the proposed new continuing education requirements over the coming months. The recently announced IRS Return Preparer Office will not begin to oversee administration of the continuing education provisions of Circular 230 until the proposed revisions to that document are finalized and the office has begun operating.

4. Attorneys and certified public accountants in some states are not subject to continuing education requirements. Will this impact the application of the proposed IRS rules for those individuals? (posted 1/22/10)

No. The lack of continuing education requirements for attorneys or certified public accountants in a specific state will not impact the exception. All attorneys and certified public accountants will be exempt from IRS CE requirements.

However, as stated in the Return Preparer Review report, the IRS believes that all tax return preparers have an obligation to stay current on the tax laws and continuing education serves to help individuals remain current and to expand their knowledge within their field of expertise. Such courses are important to tax administration given the complexity of the tax laws and the frequent changes made to the Internal Revenue Code and the rules and regulations implemented to assist in the administration of the Code.

The IRS will consider requiring continuing professional education from additional individuals if data is collected in the future that identifies such a need. Additionally, the IRS plans to reach out to licensing authorities to encourage them to support annual continuing professional education that includes federal tax law topics and updates and ethics for those individuals who are licensed by them and who prepare federal tax returns.


Public Database

1. Who will be included in the public database of return preparers? (posted 1/22/10)

At a minimum, it will include the preparers who have passed the competency exam. Other information about who would be included is not yet available. Stay tuned to the IRS.gov Tax Professionals page for information on this issue.