PTIN Definition: What Is a Preparer Tax ID Number?

A Preparer Tax Identification Number (PTIN) is an identification number the Internal Revenue Service (IRS) issues to professionals who are paid to prepare federal tax returns. This eight-digit number, which is preceded by the letter P, must be included on any return a preparer files for a client. The primary purpose of the PTIN is to allow the IRS to identify and monitor tax return preparers, enhancing the agency’s ability to oversee the tax preparation industry.

The system was first introduced in 1999 to protect the privacy of tax preparers, who were previously required to list their Social Security Numbers on client returns. Since 2010, it has been a mandatory requirement for all paid preparers.

Who Must Obtain a PTIN

The requirement to obtain and use a PTIN is directly linked to receiving payment for tax preparation services. Any individual who prepares, or assists in preparing, all or substantially all of a federal tax return or claim for refund for compensation must have a valid PTIN. This rule applies regardless of professional credentials and includes Certified Public Accountants (CPAs), attorneys, Enrolled Agents, and any other individual who charges a fee. Even foreign preparers who are compensated for preparing U.S. tax returns are required to obtain a PTIN.

There are specific exceptions to the PTIN requirement for individuals who are not compensated for their assistance. Volunteers who provide free tax help at locations sponsored by programs like the Volunteer Income Tax Assistance (VITA) or Tax Counseling for the Elderly (TCE) are not required to obtain a PTIN. Similarly, individuals who prepare their own personal tax returns do not need one. An employee who prepares their employer’s business tax returns as part of their job duties is also exempt.

Information Required for the PTIN Application

The application requires basic personal data, including your full name, mailing address, and date of birth. You will also need to provide your Social Security Number. Applicants must also supply information related to their business, which includes the business name, address, and telephone number. The IRS requires information from your most recently filed personal federal tax return.

The application includes suitability questions. Applicants must provide explanations for any past felony convictions and answer questions regarding any issues with your personal or business tax obligations. If you hold a U.S.-based professional credential, such as a CPA, attorney, or Enrolled Agent license, you must provide details including the certification number and the jurisdiction that issued it.

The PTIN Application and Renewal Process

The process to obtain a PTIN is handled primarily through an online system managed by the IRS. The first step involves creating a secure online account, which requires providing your name and email address. Once the account is established, you can proceed to the main application, where you will enter the personal, business, and tax compliance information.

After completing the application form, the final step is to pay the required non-refundable fee. As of the most recent updates, the fee is $19.75, payable by credit card, debit card, or eCheck. Upon successful submission of the application and payment, the PTIN is typically issued immediately through the online portal.

PTINs are not permanent and must be renewed annually. All PTINs expire on December 31 of each year, regardless of when they were obtained. Preparers must log into their online PTIN account between mid-October and the end of the year to complete the renewal process, which also requires payment of a renewal fee.

Responsibilities of a PTIN Holder

Holding a PTIN comes with specific professional obligations. The primary responsibility is to include the PTIN on every federal tax return you are compensated to prepare or assist in preparing. The preparer must also physically or digitally sign the return, affirming their role in its completion.

All paid tax return preparers are subject to the regulations outlined in Treasury Department Circular No. 230, “Regulations Governing Practice before the Internal Revenue Service.” This circular establishes the rules for ethical behavior, competence, and due diligence that preparers must follow. These rules govern duties such as communicating with clients, maintaining records, and exercising due diligence in ensuring the accuracy of the information submitted on a tax return. Failure to comply can result in penalties or the suspension or termination of a preparer’s right to practice before the IRS.