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The PTIN renewal season 2024 brings great news for tax preparers—a substantial decrease in the renewal fee! This modification, aimed at making compliance more accessible and less financially burdensome, represents a step in the right direction in the IRS's management of PTINs. Before we dive into the details of the cost reduction, the renewal procedure, and its implications, let's revisit the essentials.
The Preparer Tax Identification Number (PTIN) is a requirement for all tax return preparers. The IRS mandates that anyone who prepares or assists in preparing federal tax returns for compensation must possess a valid PTIN. The PTIN must be renewed annually, and the renewal cost is non-refundable. Once paid, even if the PTIN is not used or the tax preparation service is discontinued, it cannot be refunded.
Obtaining and renewing a PTIN wasn't always a paid affair. Here's a brief overview of the fee's journey:
Free Beginnings (2000): Acquiring or renewing a PTIN was initially free.
Fees Introduced (2010): An annual fee was introduced in 2010 to maintain the PTIN program.
The Great Reduction (2015): After peaking at $64.25, the fee was reduced to $50.
Fee-Free Interlude (2017-2019): A temporary pause was enacted following a 2017 court decision questioning the IRS's authority to charge fees.
Fees Return (2021-Present): The fee structure was reinstated in 2021, leading to the current reduced fee of $19.75 for 2024.
The PTIN renewal fee has dropped to a much more manageable $19.75 for 2024, covering two components:
$11.00 IRS Fee: This portion goes towards the IRS's cost of administering the PTIN program.
$8.75 Third-Party Contractor Fee: This helps support a third-party company managing PTIN applications and renewals.
The reduction was outlined in interim guidance published in the Federal Register on October 4, 2023, serving as the official notification of the fee change.
Although the IRS hasn't formally disclosed the precise rationale for the charge decrease, we can infer several reasonable assumptions from previous experiences:
Court Challenge Influence: A 2017 court case questioning the IRS's authority to charge a fee might have contributed to developing a more reasonable fee structure.
Accessibility Focus: Lowering the fee will motivate more individuals to become tax preparers.
Streamlined Program Costs: Efficiencies within the IRS may have reduced the cost of administering the PTIN program, enabling the cost modification.
Renewing your PTIN is a quick and easy online process:
Head over to the IRS PTIN system at IRS.gov/taxpros.
Log in to your existing account or create a new one if you haven't already.
Verify and update your personal and professional information.
Answer any standard compliance questions.
Pay the reduced fee of $19.75 using a credit/debit/ATM card or eCheck.
Submit your renewal and await confirmation.
It is anticipated that the adjusted PTIN renewal fee will benefit the tax preparation industry in several ways:
Reduced Financial Burden: The lower charge lessens the financial strain that comes with PTIN renewal, particularly for solo practitioners and smaller businesses.
Increased Compliance: A more affordable fee might make tax professionals more inclined to renew their PTINs on time, leading to higher compliance rates.
The 2024 PTIN renewal fee reduction, representing a nearly 36% slash from prior years, is a welcome change for tax preparers. A more affordable renewal process makes compliance easier and less financially burdensome. This move by the IRS signifies a positive step towards a more accessible tax preparation profession.
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Jason Dinesen (LPA, EA) is an entrepreneur, tax expert, and CPE Presenter. Dinesen brings over 15 years of experience helping individuals and businesses with accounting, bookkeeping, tax preparation, and business advisory in various industries. Dinesen is a regular CPE Presenter at myCPE. He has coached more than 200k+ accounting, taxes, and HR professionals on various topics of accounting, individual taxation, corporate taxation, and professional ethics. Jason has developed a strong following within the professional community for tax-related subjects. Dinesen is known for sharp tax interpretations, and he quickly brings his analysis of the latest tax updates and IRS guidance to the professional community.
Jason Dinesen
Jason Dinesen
