IRS has issued a reminder that the deadline for federal tax return preparers to renew/obtain their Preparer Tax Identification Numbers (PTINs), and the deadline for completing education requirements under IRS’s Annual Filing Season Program (AFSP), are both Dec. 31, 2018.
Background—PTINs. IRS requires that anyone who prepares or helps prepare any federal tax return, or claim for refund, for compensation, obtain a valid PTIN from IRS that is used as the identifying number on returns prepared. (Reg. § 1.6109-2) Failure to have and use a valid PTIN may result in penalties.
Background—AFSP. The voluntary IRS AFSP is intended to encourage non-credentialed tax return preparers to take continuing education (CE) courses to increase their knowledge and improve their filing season readiness. Participation generally requires 18 hours of CE, including a course in basic tax filing issues and updates, ethics, as well as other federal tax law courses. Tax return preparers who complete the AFSP requirements are eligible for inclusion in IRS’s online public directory of tax return preparers with certain recognized credentials.
Meeting the Dec. 31 PTIN deadline. IRS reminded the more than 768,000 federal tax return preparers that they must renew their PTINs for 2019. All current PTINs will expire Dec. 31, 2018.
For those who have a 2018 PTIN, the renewal process can take place online at http://www.irs.gov/ptin. Preparers who cannot remember their user ID and password can avail themselves of online tools to assist them. The process may also be completed online for persons registering for the first time.
Observation: There used to be a $50 fee to obtain or renew a PTIN, but IRS was permanently enjoined from charging such a fee in Steele v. U.S., (DC DC 7/10/2017) 120 AFTR 2d 2017-5145 (see “IRS permanently enjoined from charging PTIN fees and ordered to make refunds“).
Paper Form W-12, IRS Paid Preparer Tax Identification Number Application and Renewal, is available for paper applications and renewals and takes four to six weeks to process.
Meeting the Dec. 31 AFSP deadline. Preparers desiring to receive an AFSP Record of Completion for 2019 must: (1) complete their continuing education requirements by Dec. 31, 2018; (2) have a valid 2019 PTIN; and (3) consent to adhere to specific practice requirements in Treasury Department Circular No. 230.
The enrolled agent credential. IRS also highlighted the enrolled agent (EA) credential and encouraged non-credentialed return preparers to consider becoming an EA. IRS noted that the EA credential is a professional status, as opposed to a filing season qualification under the AFSP, issued by IRS to tax professionals who demonstrate special competence in federal tax planning, individual and business tax return preparation and representation matters.
References: For PTINs, see FTC 2d/FIN ¶ S-1522; United States Tax Reporter ¶ 61,094. For IRS’s Annual Filing Season Program, see FTC 2d/FIN ¶ T-10906.1; United States Tax Reporter ¶ 76,559.7658.