Starting Jan. 1, 2011, the use of a PTIN (Preparer Tax Identification Number) will be mandatory on all federal tax returns and claims for a refund prepared by a paid tax preparer. Individuals who, for compensation, prepare all or substantially all of any federal tax return or claim for refund must use a PTIN. Paid preparers must apply for a new or renewed PTIN through the new sign-up system at http://www.irs.gov/taxpros/.
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 PTIN is a nine-digit number that preparers must use when they prepare and sign a tax return or claim for a refund. Previously, PTIN use was optional and was used in place of the preparer’s social security number. Mandatory use of the PTIN is part of a broader effort by the IRS to regulate the tax return preparation industry and improve services for taxpayers.
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.
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 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.
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.
Are non-signing preparers disclosed on each return prepared even if another preparer reviews and signs it?
No, the names of non-signing preparers are not disclosed on the return. Although there is no plan to expand the paid preparer section of the return to include non-signing preparers, they still are required to have a PTIN and meet competency testing and continuing education requirements as applicable.
I work for a CPA firm, but I am not a CPA. I assist with returns but a CPA signs them. Do I need a PTIN? Do I need pass a competency test?
Yes, you need a PTIN. However, you do not need to pass a competency test if you are employed by a law firm, CPA firm or other recognized firm (a firm that is at least 80 percent owned by attorneys, CPAs, or enrolled agents) provided the returns you prepare are signed by an attorney, CPA or an enrolled agent who is employed by the same firm and has has a valid PTIN.
Additional guidance on supervised preparers is available in Notice 2011-6 (or view the Fact Sheet).
I own my own tax return preparation business and have a PTIN. My firm only prepares Form 1040 series returns. I intend to pass the competency test when it is available and become a registered tax return preparer. If I hire someone to prepare returns for compensation under my supervision, will they need a PTIN and will they need to pass a competency test and become a registered tax return preparer too?
Yes, anyone you hire who is preparing tax returns will need a PTIN. They will also need to pass a competency test and become a registered tax return preparer unless they are a CPA, attorney or an enrolled agent. The exception for supervised preparers only applies if the individual is supervised by an attorney, CPA or an enrolled agent and the supervised preparer is employed by a law firm, CPA firm or other recognized firm (a firm that is at least 80 percent owned by attorneys, CPAs, or enrolled agents).
Additional guidance on supervised preparers is available in Notice 2011-6 (or view the Fact Sheet).
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