IRS Can Resume Charging PTIN User Fees But Final Cost Still to Be Determined

NYS Society of CPAs, TaxStringer (June 1, 2019), Pace University Research Paper

3 Pages Posted: 4 Mar 2020 Last revised: 22 Nov 2021

Date Written: June 1, 2019

Abstract

Since 2010, the IRS has required all tax return preparers to obtain a preparer tax identification number (PTIN) and pay a user fee for that PTIN. In June, 2017, the IRS suspended the user fee for the PTIN. Tax return preparers must still obtain the PTIN, or renew their existing PTINs, but Steele v. United States (2017) held that the IRS did not have independent authority to charge a user fee. The court held, “In sum, the Court finds that although the IRS may require the use of PTINs, it may not charge fees for issuing PTINs.”

In 2019, that decision was reversed on appeal by Montrois v. United States, which held that the IRS can require tax preparers to pay a PTIN user fee. Notably, however, Montrois did not determine whether the current PTIN fee is reasonable in relation to the service provided to, or benefit received by, the tax return preparer in exchange for the payment. Instead, that question was remanded back to the district court for determination. Accordingly, formal resumption of the PTIN user fee must still await the court's determination of a "reasonable" fee for the PTIN.

Keywords: IRS, Tax Return Preparers, PTINs, Tax Practice & Procedure

Suggested Citation

Colella, Frank G., IRS Can Resume Charging PTIN User Fees But Final Cost Still to Be Determined (June 1, 2019). NYS Society of CPAs, TaxStringer (June 1, 2019), Pace University Research Paper, Available at SSRN: https://ssrn.com/abstract=3547024

Frank G. Colella (Contact Author)

Pace University ( email )

One Pace Plaza
New York, NY 10038-1502
United States

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