It’s PTIN Renewal Season! Are You Ready?

IRS Solutions 8 December, 2022

In late October, the IRS announced that it was time for all tax preparers to renew their Preparer Tax Identification Numbers. Here's a quick guide to the PTIN from the experts at IRS Solutions – what it is, why you need one, and everything you need to know about PTIN renewal – along with information about some other critical IRS identification numbers.

What is a PTIN?

The PTIN is an identification number that the IRS issues to professional tax preparers such as Certified Public Accountants (CPA), Enrolled Agents (EA), and anyone who prepares taxes for a fee.

Do I Need a PTIN?

Anyone who is paid to prepare or assist in the preparation of federal tax returns must have a valid PTIN from the IRS. You must use the PTIN to identify yourself on any return filed with the IRS. Only professionals who are paid to prepare tax returns for others are required to have a PTIN. Individual taxpayers do not need PTINs.

How Do I Get a PTIN?

If you don’t already have a PTIN, the IRS makes it easy to get one in just a few simple steps. Here are their instructions:

START HERE.
Select the "Renew or Register" button.
Select "Create an Account" and follow the prompts to complete the account setup process and obtain a temporary password.
Log in and follow the remaining steps to access the online PTIN system.
Select the "Register for a PTIN" button from the main menu.

PTIN Renewal

All PTINs are classified as Active, Voluntary Inactive, or Inactive. All paid preparers must renew their PTIN annually in order for their PTINs to remain active. The renewal season typically begins in mid-October and closes on December 31. Forgetting to renew your PTIN and missing the December 31 deadline can be costly. The IRS may assess preparer penalties for being paid to prepare and file returns without a PTIN.

How to Renew Your PTIN Online

You can renew your PTIN through the mail using IRS form W-12, but the turnaround time is typically four to six weeks. It’s much faster and or more convenient to renew online.

Online PTIN renewal only takes about 15 minutes. You’ll need to answer a few questions and ensure that all of the information on file with the IRS is correct.

START HERE.
Select the "Renew or Register" button.
Select "Login" and enter the user ID and password to access the online PTIN system.
Select the "Renew my PTIN" button from the main menu.

After completing the online form and paying your renewal fee, you will receive electronic confirmation of your renewal. There is a fee for PTIN renewal; it is paid annually, and it is non-refundable. You can pay it via debit, credit, ATM card, or eCheck.

PTIN System Enhancements

The IRS rolled out some enhancements and upgrades to the online PTIN renewal system this year. The agency has announced that the enhancements you can expect include the following:

The system is now mobile responsive/mobile friendly, so you can access it conveniently with your smartphone or tablet.
A dynamic new system design adapts based on your responses and guides you to the correct application.
Paid preparers can renew/register for multiple calendar years at one time, taking one thing off your to-do list.
Webchat agents are now available for assistance with PTIN account questions.

Do I Need Any Other IRS ID Numbers?

Anyone in practice working with tax resolution clients must be identified by a Centralized Authorization File (CAF) number. The Centralized Authorization File (CAF) is a database that the Internal Revenue Service uses to manage information regarding professionals appointed to act on behalf of others. The CAF number identifies the file containing any legal authorizations filed by a particular tax resolution professional. Getting a CAF number is easy. The first time you file IRS Form 2848 (Power of Attorney and Declaration of Representative) or Form 8821 (Tax Information Authorization), simply indicate "none" as your CAF number, and one will be automatically generated for use on all future cases.

Paid preparers who file more than ten tax returns for clients each year also need an IRS Electronic Filing Identification Number (EFIN). This ID is required if you use IRS e-file to file tax returns on behalf of clients. The EFIN is issued once and does not require renewal. You can get an EFIN by completing the IRS e-file Application to become an Authorized IRS e-file Provider. There is no fee to obtain an EFIN.

Unlike PTINs, EFINs are not specific to individuals. Instead, one ID covers you and anyone working in your practice. However, you will have to update your file within 30 days when changes occur at your firm. If you don’t make the required updates within 30 days, your EFIN can be inactivated, and you may have to file for a new one. These necessary updates include:

Staff changes in your tax preparation department.
Address or contact information changes for tax preparers working at your practice.
Changes in the principal (the person authorized to act as your business’s authorized representative in tax and legal matters) that you listed on your original application
Additions to or changes in other responsible officials that you listed on your application
Business address additions or changes (each location requires its own EFIN)
The sale or closure of your business

This is all in addition to your Taxpayer Identification Numbers such as your Employer Identification Number and Social Security Number. It’s fortunate you’re a tax professional, and numbers are your thing!

IRS Solutions is Here to Help

With features to support your tax resolution practice, including automated alerts, solution recommendations, transcript analysis, easy access to forms, marketing materials, continuing education, membership in an exclusive and supportive online community of peers, and outstanding customer support, IRS Solutions is a tax pro’s best friend. Let’s talk about how we can help you generate revenue while enjoying a calmer, more steady flow of work throughout the year. Schedule a demo today.

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