1099 Tax Software Blog

The IRS is now notifying tax return preparers about their PTIN renewals (Preparer Tax Identification Numbers). Tax return preparers must renew this number if they are paid for their services, since a new law mandates that they have a PTIN used on their federal returns that they prepare. The law goes into effect on January 1, 2011.

The website where tax return preparers can register for the PTIN is a http://www.IRS.gov/taxpros. The registration fee is $64.25 and there is a registration process that requires the creation of an account and PTIN application.

The purpose of the PTIN system is to ensure a high quality of standard on federal tax returns. In the past there has been no system of registration for federal tax return preparers, however the IRS is looking to improve the quality of federal tax returns and reduce errors on returns as well. More information can be found in the IRS release:

IR-2010-106, Oct. 25, 2010

WASHINGTON — The Internal Revenue Service has begun notifying about 1 million tax return preparers to remind them that they must renew their Preparer Tax Identification Numbers (PTIN) if they are still paid preparers. Use of the PTIN will be required on all federal returns prepared by paid tax return preparers starting Jan. 1.

Tax return preparers can register immediately using a new PTIN sign-up system available through www.IRS.gov/taxpros. Preparers will need to create an account, complete the PTIN application and pay a $64.25 fee before getting their PTINs.

The IRS will be sending approximately 125,000 notification letters each week for eight weeks. The notifications are based on those tax return preparers who currently have PTINs. Tax return preparers who received their PTINs prior to the new system launch on Sept. 28, 2010, must register using the new sign-up system. Existing PTIN holders who register through the new system will generally be reassigned their same numbers.

The PTIN was created several years ago as a nine-digit number that tax return preparers could obtain from the IRS to use on tax returns instead of their Social Security numbers.

The PTIN requirement is one of the main provisions in a new oversight program to help regulate the tax preparation industry. Anyone paid to prepare all or substantially all of any federal tax return or claim for refund must have a PTIN. The requirement applies to all tax return preparers, including those who are enrolled agents, certified public accountants and attorneys.

by

Erich J. Ruth

Erich J. Ruth provides technical support for National Software which is the parent company for 1099FIRE. 1099FIRE develops and markets a comprehensive range of products that enables any size of business or institution to effectively manage and comply with year-end filing requirements. 1099FIRE is an employee-owned company located in Phoenix, Arizona.

If you have any questions or comments about our software, feel free to contact us at any time.