PTIN FEES REDUCED:

The IRS has updated its regulations concerning the user fees for the application and renewal of preparer tax identification numbers, reducing the fee amount in response to excessive fee litigation.

Issued September 29, interim final regulations (T.D. 9980) and proposed rulemaking (REG-106203-23) reduce the cost of PTIN application and renewal from $30.75 to $11.

The IRS began expanding regulatory control over return preparers who were not attorneys or CPAs in 2010. It created a mandatory credentialing process that included a background check, a competency exam, and ongoing educational requirements.

After implementing the changes, the IRS began charging preparers fees for PTIN registration and renewal. The initial fee was $50 and was used to fund customer service, IT development, management and supervisory costs, and program compliance that included checking professional designation, personal tax compliance, and criminal background.

In 2014 the fee was reduced to $33 after some regulations were invalidated in Loving v. IRS, 742 F. 3d 1013 (D.C. Cir. 2014). In February, a district court in Steele v. United States, No. 1:14-cv-01523 (D.D.C. 2023), ordered the IRS to issue partial refunds to return preparers after finding the government charged excessive fees.

The regulations are to take effect on October 19.