Do I Need to Renew My PTIN Every Year?
Tax professionals: Understand the vital annual obligation to sustain your credentials. Ensure uninterrupted compliance for your preparation services.
A Preparer Tax Identification Number (PTIN) is a unique identification number issued by the Internal Revenue Service (IRS) to paid tax preparers. It is a mandatory identifier for any individual who prepares federal tax returns or claims for refund for compensation. The IRS requires annual renewal of a PTIN to ensure compliance and maintain updated records.
Understanding the PTIN Requirement
A PTIN is a unique eight-digit number, preceded by the letter P, that the IRS issues to tax professionals. It replaces the need for paid preparers to use their Social Security numbers on tax returns, thereby protecting their privacy. Any individual who receives payment for preparing federal tax returns or claims for refund must obtain and use a PTIN. This applies to various tax professionals, including Certified Public Accountants (CPAs), Enrolled Agents (EAs), and other tax preparers.
The primary purpose of the PTIN is to enhance accountability and oversight within the tax preparation industry. By requiring PTINs, the IRS can track the activities of paid preparers and hold them responsible for the accuracy and completeness of the returns they prepare. This system helps maintain the integrity of the tax system and protects taxpayers by ensuring that those who prepare returns for a fee meet certain standards.
The Annual PTIN Renewal Process
Tax preparers must renew their PTINs each year, as all PTINs expire on December 31st of the calendar year for which they are issued. The renewal period begins in mid-October for the upcoming tax year, allowing ample time for preparers. The most common and efficient method for renewal is online through the IRS website’s PTIN system.
To renew a PTIN online, preparers log into their existing PTIN account, verify their personal information, and answer a few questions. Information for renewal includes the existing PTIN, personal details like name and mailing address, and business information. A non-refundable renewal fee of $19.75 is required for 2025. Completing the online process takes about 15 minutes, with immediate confirmation of renewal. Alternatively, preparers can renew by mail using Form W-12, but this method can take approximately four to six weeks for processing.
What Happens If You Don’t Renew Your PTIN
Failing to renew a PTIN by the December 31st deadline can lead to serious consequences for paid tax preparers. Without a valid and current PTIN, an individual is legally unable to prepare federal tax returns or claims for refund for compensation.
The IRS can impose penalties for preparing returns without a valid PTIN. For returns filed in calendar year 2025, the penalty for failing to include a PTIN on a tax return or claim is $60 for each failure, with a maximum penalty of $31,500. Additionally, non-renewal could result in disciplinary actions from the IRS Office of Professional Responsibility, potentially including injunctions or other administrative measures.