Preparer Tax Identification Number (PTIN)

 

What Is a Preparer Tax Identification Number?

A preparer tax identification number (PTIN) is an Internal Revenue Service (IRS) identifier implemented in 1999 that has required all paid federal tax return preparers to register with the federal government and obtain a unique number since 2010. Tax preparers are any individuals who prepare, calculate, and file income tax returns on behalf of individuals or businesses, and receive compensation for their services. Preparer tax identification number applicants must provide satisfactory answers to several suitability questions to receive a preparer tax identification number. Tax preparers must renew their preparer tax identification numbers each calendar year.


(Images source from: https://www.astps.org/wp-content/uploads/Really-Step-1.jpg)

Note: 

  • A preparer tax identification number (PTIN) is an Internal Revenue Service (IRS) identifier implemented in 1999 that has required all paid federal tax return preparers to register with the federal government and obtain a unique number since 2010.
  • Preparer tax identification numbers were created in 1999 to protect the privacy of tax preparers.
  • Certified Public Accountants (CPAs) represent the largest credentialed group,

How a Preparer Tax Identification Number (PTIN) Works

In addition to obtaining a preparer tax identification number (PTIN), the IRS requires enrolled agents to pass a test and complete continuing education requirements. These additional requirements do not apply to attorneys and certified public accountants (CPAs) in good standing, or to supervised preparers and non-1040 preparers, whose work is overseen by an enrolled agent, attorney or a CPA.

Preparer tax identification numbers were created in 1999 to protect the privacy of tax preparers. From 1999 to 2010, preparers were given the option of providing their number or their Social Security number when signing tax returns. In Sept. 2010, the IRS created a new electronic preparer tax identification system. Since then approximately 1.77 million preparer tax identification numbers have been issued and 748,927 individuals held current numbers as of Aug. 26, 2021. CPAs represent the largest credentialed group, with 204,678 individuals currently holding preparer tax identification numbers.

Preparers were originally charged a registration fee of $64.25 and annual renewal fees similar to the registration fee. The fee was reduced to $50 in 2016 after a class action lawsuit commenced against the IRS. In 2017, the fee was eliminated following a ruling on the class-action lawsuit. The fee had been the same for every preparer, regardless of how many returns the preparer filed.

In June 2017, U.S. District Court Judge Royce Lamberth ruled that collecting fees for issuing tax preparer identification numbers was illegal and that the IRS had exceeded its authority by collecting these fees. The case was Steele, et al. v. the United States, and was a class action representing all individuals and entities who have paid in order to receive a tax preparer identification number. The Judge concluded that while the IRS could continue to issue the numbers, the fees were illegal because they were not a “service or thing of value” provided by the agency.

Following the ruling, the IRS suspended the tax preparer identification number system but reinstated it without requiring fees later in June. Taxpayers can search for a registered tax preparer and verify that their tax preparer is registered by checking the IRS’ directory.

(Article source from: https://www.investopedia.com/terms/p/ptin.asp)

If you need any types of CPA assistance please visit us @ www.cpacb.com


Comments

Post a Comment

Popular posts from this blog

How to Configure Firewall and Security Settings for QuickBooks Desktop?

Image
  If you are facing the issue that your firewall blocks internet access for some of the specified QuickBooks programs, then there is a probability that you will face further errors that could hinder smooth working of QuickBooks desktop. You can get rid of these errors by either updating the firewall to the latest version or by configuring the firewall software. Moreover, you can also   add some exceptions for QuickBooks firewall ports . There can be various other steps that you might require to carry out, in order to get rid of various errors. In this article we are going to discuss the process to  configure Firewall and security settings for QuickBooks desktop . If you are looking for the same, then make sure to read this post till the end. However, you can connect with our  QuickBooks enterprise support  team using our support line for further assistance. Read this Also:   How to Fix QuickBooks error 6000, 832? What is Firewall? Before you explore the ...
Read more

What is Cash Flow ?

Image
  What is Cash Flow ? Cash flow is the net amount of cash and cash equivalents being transferred into and out of a business. Cash received represents inflows, while money spent represents outflows. ( Image source from :  https://thumbs.dreamstime.com/b/cash-flow-concept-idea-financial-growth-development-money-investment-profit-invest-earnings-get-increase-isolated-cartoon-137829450.jpg ) At a fundamental level, a company’s ability to create value for shareholders is determined by its ability to generate positive cash flows or, more specifically, maximize long-term free cash flow (FCF). FCF is the cash that a company generates from its normal business operations after subtracting any money spent on capital expenditures (CapEx). Cash Flow Categories: 1. Cash Flows from Operations (CFO):  CFO, or operating cash flow, describes money flows involved directly with the production and sale of goods from ordinary operations. CFO indicates whether or not a company has enough ...
Read more

Knowledge Economy

Image
  What Is the Knowledge Economy? The knowledge economy is a system of consumption and production that is based on  intellectual capital . In particular, it refers to the ability to capitalize on scientific discoveries and basic and applied research. This has come to represent a large component of all economic activity in most developed countries. In a knowledge economy, a significant component of value may thus consist of  intangible assets  such as the value of its workers' knowledge or intellectual property. KEY TAKEAWAYS The knowledge economy describes the contemporary commercialization of science and academic scholarship. In the knowledge economy, innovation based on research is commodified via patents and other forms of intellectual property. In the Information Age, the global economy has moved further toward the knowledge economy. The Knowledge Economy Explained Less developed countries tend to have agriculture and manufacturing-based economies. A developing co...
Read more