What's Happening?
The Internal Revenue Service (IRS) has announced a reduction in the fee for obtaining or renewing a Preparer Tax Identification Number (PTIN). Following a biennial review by the IRS Return Preparer Office, the fee has been decreased from $11 to $10, with an additional $8.75 payable to a third-party contractor. This new fee structure will take effect at the start of the next PTIN renewal cycle on October 16, 2025. The IRS anticipates that over 900,000 individuals will apply for an initial or renewal PTIN during each of the next three renewal cycles. The Treasury and IRS are also inviting public comments and requests for a hearing on the proposed rulemaking by October 30, 2025.
Why It's Important?
The reduction in PTIN fees is significant for tax professionals, as it lowers the cost of compliance for those who prepare federal tax returns for compensation. This change could encourage more individuals to enter the tax preparation field, potentially increasing competition and improving service quality for taxpayers. Additionally, the invitation for public comments and hearings reflects the IRS's commitment to transparency and stakeholder engagement in its regulatory processes. The decision to lower fees may also be seen as a response to feedback from tax professionals seeking to reduce operational costs.
What's Next?
As the new PTIN fee structure takes effect, tax professionals will need to ensure they renew their PTINs by the December 31 expiration date to avoid penalties. The IRS will continue to accept public comments and requests for hearings until October 30, 2025, providing an opportunity for stakeholders to influence future regulatory decisions. The outcome of this feedback process could lead to further adjustments in IRS policies or fee structures, impacting the tax preparation industry.
