How to Get Your Preparer Tax Identification Number (PTIN) from the IRS
As you may have heard, the Internal Revenue Service (IRS) is busy making major changes recently with regard to its regulation of professional tax preparers. These changes are ongoing and not finalized, as shown in a recent IRS press release about the upcoming “Competency Test” for professional tax preparers.
Please don’t let this “extra” test scare you. As of today, new tax preparers are NOT required to pass a “Competency Test” before IRS will issue a PTIN. Repeat: you are NOT required, as of now, to pass an IRS-administered Competency Test in order to start preparing tax returns for pay as a professional tax preparer.
It is true that sometime in the future–we don’t know when yet because IRS has not finalized the regulations–an IRS Competency Test will be initiated. But that time has not yet arrived. We will keep you posted as IRS (hopefully) clarifies things in the near future.
In the meantime, though, you can get a PTIN without taking any Competency Test whatsoever. In this article, we’ll tell you exactly how to get a PTIN from the IRS.
What Is a PTIN, Anyways?
But perhaps we are getting a bit ahead of ourselves. What is a PTIN, anyways?
Let us give you a little history on that, so you know what you’re applying for.
As of December 31, 2010, you cannot prepare tax returns for pay without a Preparer Tax Identification Number, or PTIN, issued by the Internal Revenue Service. In years past, the IRS was much more lax in terms of “vetting” tax preparers, for example allowing tax preparers to use their Social Security Numbers as the ID number on the tax return. In general, things were just much more casual than they are now, as far as the IRS caring about who is getting paid to do taxes and who isn’t.
However, after a 2009 IRS study that showed how many “professional” tax preparers were quite incompetent, the IRS started tightening up the standards on who can be a professional tax preparer and who can’t.
The first step in that direction was the 2010 requirement that all tax preparers maintain a valid PTIN on file with the IRS.
The PTIN is a sort of ID number that will need to be included on every tax return that you prepare for a fee. This number will help IRS keep tabs on tax preparers who are committing fraudulent acts or are blatantly incompetent.
How to Get a PTIN from the IRS
As of now, the IRS process for obtaining a PTIN remains relatively fast and easy. However, as noted above, there is talk that the IRS will be getting stricter on who gets a PTIN and who doesn’t in the future, so the instructions on how to get a PTIN on this page may change. We promise to keep you updated.
For now, though, this is the process:
First, go to the IRS website, here is the specific page on the IRS website to get a PTIN.
On this page, the IRS gives a clear tutorial that outlines the steps to obtain a PTIN:
- Create Your Account
- Apply for Your PTIN
- Pay Your Fee ($64.25)
- Get Your PTIN
In most cases, it’s pretty easy to get your PTIN from the IRS and usually takes only 15-30 minutes.
Simply go onto the PTIN Page of the IRS Website and follow instructions.
Our Advice to You: Get Your PTIN as Soon as You Can
As noted in the introduction to this article, it is clear that sometime in the near future, tax preparers will need to pass a Competency Test in order to keep their PTINs active. However, IRS has not yet decided the “due date” for passing this exam.
Welcome to tax world, where the most important information comes out at the last minute!
As of right now, again as noted above, new tax preparers do NOT have to pass this Competency Test before obtaining a PTIN and starting work as a paid professional tax preparer. According to the “Frequently Asked Questions” page for the IRS Competency Test, the projected “due date” by which new tax preparers will be required to pass this Competency Test in order to keep their PTINs active will be December 31, 2013.
In other words, if you are a new tax preparer, you should be able to get your PTIN now, start doing taxes, and then just know that by December 31 of 2013, you will need to pass an IRS Competency Test in order to keep your PTIN current and continue preparing tax returns professionally.
IRS is still in the process of finalizing the exact requirements on this point.
For new tax preparers, then, we would highly recommend that you take immediate action to get your PTIN before the IRS has a chance to make it harder or more complex to get a PTIN. As of right now, the process of getting a PTIN is still fast and easy, and you can get your PTIN without passing any IRS Competency Test. In the future, obtaining a PTIN may not be so fast and easy, and you may have to pass a test. So if you like fast and easy, and avoiding tests, get your PTIN sooner rather than later!
We are in constant contact with the IRS and with the California Tax Education Council regarding this issue of changing PTIN requirements. We will update these instructions on how to PTIN if and when the process changes.
As a final reminder and recommendation, though: if you get your PTIN now, you won’t need to worry about the IRS changing the rules on you and making it harder, so for maximum convenience and security, apply for your PTIN now, not later.