CPA Firm Objects to Charging Fee Under Proposed Regs on PTIN Program

Under proposed regulations (REG-139343-08), Preparer Tax Identification Numbers (PTINs) must be included along with the preparer's signature on all tax returns or refund claims filed after December 31, 2010. Tax return preparers will not be allowed to use a SSN as a preparer identifying number unless specifically prescribed by the IRS in forms, instruction, or other guidance. The regulations state that preparers will be charged a fee to obtain an initial PTIN as well as renewal fees to maintain their PTIN.

In the IRS e-services On-line Tutorial Application titled "How Do I Apply for a PTIN?" can be found the following sentence: "The PTIN may be used in place of a Social Security Number in the filing of client tax returns according to IRS rules." These rules are found in Section 6109(a) which initially provided that the identifying number for a tax return preparer was that individual's SSN. In 1998, Section 3710(a) provided preparers with the option of using a PTIN in lieu of their social security number in order to maintain the confidentiality of SSNs. Today's proposed regulations are now mandating the usage of PTINs in order to regulate preparers' compliance thru testing and continuing education.

As the IRS study which was initiated in June of 2009 and published in December 2009 clearly demonstrated, there is a need for regulation in the tax preparation industry. There has not been a standardization of requirements or accountability for non-CPA preparers and state requirements have varied dramatically. Using the PTIN system to track preparers and require them to meet certain standards should be a good step toward eliminating some of the problems which were highlighted in that study.

However, there does not appear to be any basis for the new PTIN fee structure. PTINs, like SSNs, should not be issued for a charge because they are primarily issued for the convenience of the government. If a given tax preparer does not meet certification or continuing education standards, that PTIN should merely be deactivated. By subjecting preparers to licensing fees for PTINs, the IRS is taking a departure from the stated purpose of these numbers and is simply subjecting preparers to yet another form of taxation.

We appreciate your thoughtful consideration of these comments. It is hoped that you will reconsider these proposed fees and that you will instead continue to issue PTIN numbers without assessing user fees.