Category: General FAQ
Applying For A PTIN
Starting Jan. 1, 2011, the use of a Preparer Tax Identification Number, or PTIN, became mandatory on all federal tax returns and claims for a refund prepared by a paid tax preparer. The PTIN is a nine-digit number that preparers must use when they prepare all or substantially all of any federal tax return or claim for refund.
Paid preparers must now apply for a new PTIN or renew their existing PTIN through the new online sign-up system on www.irs.gov. Any preparer who obtained a PTIN prior to the new sign-up system launch on Sept. 28, 2010, must apply again. Generally, preparers with existing PTINs will be permitted to retain their existing numbers if the information they provide during the sign-up process matches what the IRS currently has on file.
The IRS has also released Form W-12 that can be used if you choose to apply for a PTIN by mail. Form W-12 replaces Form W-7P. You should allow four to six weeks to receive your PTIN by mail.
*UPDATE: Effective Jan. 1 2012, PTIN holders are required to take 15 hours of continuing education courses before then end of the calendar year.
To view Frequently Asked Questions concerning the use of a PTIN, select the links below.
Can multiple individuals or one office share one PTIN?
No, every individual who, for compensation, prepares or assists in the preparation of a tax return or claim for refund must have his or her own PTIN and each tax return preparer may only obtain one PTIN.
If I don't have a PTIN, can I still prepare tax returns for compensation?
No. You must have a PTIN to prepare tax returns for compensation. To obtain your PTIN, submit an application online or on paper Form W-12 and pay the required fee. If you submit your application online, your PTIN generally will be provided to you immediately after you complete the application process and pay the required fee. If you submit your application using a Form W-12, it may take 4 to 6 weeks for the IRS to process your application and for you to receive your PTIN.
Is there an age requirement for obtaining a PTIN?
Yes, applicants must be at least 18 years of age.
What penalties can be imposed against tax return preparers who have not obtained a PTIN?
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, and/or disciplinary action by the IRS Office of Professional Responsibility.
What is the difference between a PTIN and an EFIN? Does a preparer need both?
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 that 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. There is an annual fee 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.
When multiple paid preparers are involved in preparation and/or review of a return, who is required to sign the return?
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 PTIN requirements, which require all preparers to register and obtain a PTIN, do not change the existing rules regarding who is the signing tax return preparer.