IRS Urges Small Business Tax Preparers to Renew PTINs for 2024 Filing Season

The Internal Revenue Service (IRS) has issued a reminder to the approximately 800,000 active tax return preparers about the importance of renewing their Preparer Tax Identification Numbers (PTINs) ahead of the 2024 filing season.

Why PTINs Matter to Small Businesses

A PTIN is an essential requirement for anyone preparing or assisting in the preparation of federal tax returns for compensation. This includes numerous small business tax advisors and financial consultants. If your business involves filing tax returns for clients, it’s vital to be aware that PTINs expire on December 31 of the calendar year for which they’re issued. Therefore, all PTINs obtained for 2023 will expire on December 31, 2023.

The cost associated with renewing or obtaining a PTIN for 2024 is $19.75. Broken down, the fee comprises $11 per application or renewal, coupled with an $8.75 fee which goes to a third-party contractor. It’s imperative to note that this fee is non-refundable. Failing to possess and use a valid PTIN might attract penalties.

Swift Online Renewal

For efficiency, the IRS recommends the online renewal process for those with PTINs set to expire at the end of 2023. This method takes roughly 15 minutes. While there’s an alternative paper option via Form W-12, it can be more time-consuming, taking up to six weeks to process.

To facilitate ease, the online system also offers several features beneficial to tax preparers. Not only can you renew your PTIN, but you can also check your ongoing education credits, view summaries of returns associated with your PTIN for the year, and receive messages from the IRS Return Preparer Office in a secure environment.

Enhancing Competence Through the Annual Filing Season Program

Specifically designed for tax return preparers who aren’t enrolled agents, attorneys, or CPAs, the Annual Filing Season Program promotes professionalism. The IRS designed this voluntary initiative to spur non-credentialed tax return preparers to pursue continuous education. The goal is to boost their proficiency and readiness for the filing season.

To be a participant, preparers need to renew their PTIN, complete up to 18 hours of education with IRS-approved providers before the end of 2023, and commit to specific standards outlined in the Treasury Department Circular 230.

Those who fulfill these steps receive a Record of Completion and get listed in a public directory on the IRS website. This registry assists taxpayers in finding qualified tax return preparers within their locality.

The Value of the Enrolled Agent Credential

Enrolled agent status is a credential the IRS bestows upon tax professionals who showcase exceptional competence in areas like federal tax planning and tax return preparation. They possess unrestricted rights to practice before the IRS, which enables them to represent any client on all tax matters.

For non-credentialed tax return preparers aspiring to elevate their careers, the IRS suggests considering this credential. It’s worth noting that enrolled agents, even if they don’t prepare tax returns, must renew their PTIN annually to retain their active status.

The IRS’s recent reminders highlight the significance of PTIN renewals, especially for small business tax preparers. As the end of the year approaches, ensuring one’s credentials are up to date can make a significant difference in one’s professional standing and the service provided to clients.

Image: Irs

Joshua Sophy Joshua Sophy is the Editor for Small Business Trends and has been a member of the team for 16 years. A professional journalist with 20 years of experience in traditional media and online media, he attended Waynesburg University and is a member of the Society of Professional Journalists. He has held roles of reporter, editor and publisher, having founded his own local newspaper, the Pottsville Free Press.