Anybody who prepares or aids in the preparation of filing federal tax returns for a fee must possess a valid PTIN renewed for the current year. All enrolled tax return agents must also have a valid PTIN. With respect to obtaining a PTIN, there are several questions that come to mind.
In this article, we have listed some of the very important questions on PTIN across sub-domains, while trying to answer them as correctly as possible. In case you do not find answer to your questions below, please feel free to contact us.
A Preparer Tax Identification Number (PTIN) should be obtained by any and every enrolled agent and tax preparers who aid in the preparation of U.S. federal tax returns, refunds, claims, or tax forms submitted to the IRS, and are duly compensated for the same. At the same time, an agent does is not required by law to obtain a PTIN if he/she is working on the below mentioned documents -
Certified public accountants, as well as attorneys are not required to get a PTIN. They will need it only if they take undertake the process for compensation of a federal tax return file or claim for a refund.
Usually, agents who are "enrolled retirement plan agents" need to obtain a Preparer Tax Identification Number, only if they prepare or aid in the preparation of all or substantially all those items that are not present on the list of forms which are exempt from the PTIN requirement.
No. Every individual person who prepares or aids in the preparing of a tax return or claim for refund, for compensation of course, must have his / her own PTIN. It is necessary to keep in mind that every preparer of tax return can obtain only one PTIN, which cannot be shared with other preparers.
No. You first need to obtain a PTIN to prepare tax returns for compensation.
Yes, there is an age limit of 18 years. An applicant must be aged 18 years or above to obtain a PTIN.
Non-availability of a current PTIN may lead to the strict imposition of Internal Revenue Code section 6695 penalties, as well as injunctions, and/or a disciplinary action by the IRS Office of Professional Responsibility.
There are quite a few differences between PTIN and EFIN. The IRS issues a Preparer Tax Identification Number (PTIN) to preparers of paid tax returns. It is referenced to as the identification number of a tax preparer, which is should be entered in the "Paid Preparer" section of a tax return form. An annual fee of $50.00 has to be borne by the preparer for securing a PTIN.
On the other hand, an EFIN stands for an Electronic Filing Identification Number. This is also issued by the IRS. However, it is issued to those firms or individuals who have been recognized or approved as authorized IRS e-file service providers. This number is applicable when an electronic return is filed. The data of the preparer and filing individual or firm is transmitted to the IRS.
You must note that there is no fee involved for securing an EFIN. Another thing to note in PTIN vs. EFIN is that a PTIN is issued to individuals only, whereas an EFIN is issued to individuals as well as firms.
No, there is no need for an employee to obtain a PTIN, because an employee is not required to sign as a paid preparer when filing the federal tax returns for his employer or organization. However, if the same employee prepares and files federal tax returns for other companies, for a fee, then the employee has to register and obtain a PTIN for the same.
No, they are not required to get a PTIN because they only assist in the formatting and transmission of federal tax returns in an electronic format. They cannot prepare a federal tax return file, or even file a claim for refund for a fee.
Preparers of Non-1040 returns usually are required to obtain a PTIN, unless they fall in one of the categories as mentioned in the first question.
As per the existing Treasury regulations under sections 1.6695-1(b) and 301.7701-15(b)(1), every individual tax return preparer, who has the primary role of being responsible for the overall preparation and accuracy of a return, is the signing tax return preparer. As per the requirements of the PTIN, all the preparers must have or obtain a PTIN.
The names and information of non-signing preparers are never disclosed. However, they are required to have a PTIN.
Since the bookkeeper is only assisting the tax return preparer, he/she does not need to obtain a PTIN.
No, they do not need a PTIN since they are not preparing the tax returns.
Yes, the interns should obtain a PTIN because this time around they are preparing tax returns, even though they are not signing the returns. One must have a PTIN to prepare tax returns.
No, since the administrative assistant is not preparing the tax returns, there is no need to obtain a PTIN.
Further analysis of this situation is required to ascertain whether the 4 associates need to obtain a PTIN or not. It depends on the circumstances prevalent in the firm. At the same time, one must remember that in case an individual prepares or aids in preparing all or substantially all of a tax return, then that individual must obtain a PTIN.
No. As per the PTIN regulations, the definition of a tax return preparer is clearly carved out. Reporting agents who do not exercise any discretion or judgment on their clients' underlying tax positions, are not tax return preparers. Hence, they do not need to obtain a PTIN.
Yes. As per the PTIN regulations, all preparers of tax returns, who do it for a fee, even if it is only for assisting in the preparation of tax returns or refunds, have to obtain a PTIN.
No, because Form 5558, Application for Extension of Time to File Certain Employee Plan Returns, and Form 8955-SSA, Annual Registration Statement Identifying Separated Participants with Deferred Vested Participants, are for the purposes of Notice 2011-6, part of the "Form 5500 series" of tax returns.
Yes, certified public accountants or attorneys do need to get a PTIN if they are preparing all or substantially all a return or a tax refund. However, it is important to note that as per the authority of section 1.6109-2(h), an attorney or certified public accountant will not be required to obtain a PTIN if they only advise a client regarding a claim for refund.
Yes, any individual who prepares Forms 2290 for a fee or compensation has to register with the IRS in order to get a PTIN.
In most cases the answer is yes. For more information please have a look at the exemptions answered in Question 1.
Yes, they need to obtain a PTIN because anyone who is hired to prepare tax returns needs to have a PTIN.
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Also, read FAQs Frequently Asked Questions on SSN Requirements for Obtaining a PTIN. Contact us to outsource your accounting requirements and benefit from our bespoke services.