PHOENIX — The Internal Revenue Service reminded the nation’s more–than–715,000 federal tax return preparers that they must renew their Preparer Tax Identification Numbers for 2016. All current PTINs will expire Dec. 31.
Anyone who prepares, or assists in preparing, a federal tax return or claim for compensation, must have a valid PTIN from the IRS. The PTIN must be used as the identifying number on these prepared returns.
“We ask that you renew your PTIN as soon as possible to avoid a last-minute rush,” Carol A. Campbell, director of the IRS Return Preparer Office, said. “It’s easy to let this slip as the holiday season approaches.”
Many tax professionals have already shown they see the value in renewing early. The online system has been processing 2016 renewals since Nov. 1. During the first 10 days of availability, more than 136,000 preparers renewed their PTINs and more than 4,000 obtained new PTINs for the upcoming 2016 tax season.
Whether applying for a first-time PTIN or renewing a 2015 PTIN, the action can be completed online and only takes a few minutes.
The annual fee is $50. If you already have a PTIN and cannot remember your user ID and password, there are online tools to assist you. Tax return preparers can get started online, here.
Form W12, IRS Paid Preparer Tax Identification Number Application and Renewal, is available for paper applications and renewals but takes four to six weeks to process. Failure to have and use a valid PTIN when preparing returns may result in penalties for paid tax return preparers.
All enrolled agents, regardless of whether they prepare returns, must have a PTIN in order to maintain their status.
With the opening of the 2016 PTIN renewal season, the IRS will also begin issuing Annual Filing Season Program Records of Completion for 2016.
The IRS Annual Filing Season Program is intended to encourage noncredentialed tax return preparers to voluntarily 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 and other federal tax law courses. More information on the types and amounts of CE required for the program is available online.
In addition to continuing education, to participate in the Annual Filing Season Program, PTIN holders must have a valid PTIN for 2016 and must also consent to adhere to specific practice requirements in Treasury Department Circular No. 230 in order to receive an Annual Filing Season Program Record of Completion.
The IRS has created a new video to demonstrate how to sign the Circular 230 consent and print the Record of Completion.
Tax return preparers who participate in the program are included in the Directory of Federal Tax Return Preparers with Credentials and Select Qualifications created to help taxpayers make wise decisions when choosing tax return preparers.
The directory also contains information on attorneys, certified public accountants, enrolled agents, enrolled retirement plan agents and enrolled actuaries who are registered with the IRS.
Guidance on the different types of tax return preparers is available online.