IRS slashes PTIN fees

The Internal Revenue Service is reducing the annual cost of a Preparer Tax Identification Number after a court ruled that the charge was too high.

The application and renewal fee will be reduced to $11, plus an extra $8.75 for payment to a third-party contractor, the IRS said in interim final regulations. That's considerably lower than the 2023 fee of $30.75 for renewing or obtaining a PTIN. The move comes after a federal district court ruled earlier this year in the case of Steele v. United States that the IRS was charging excessive PTIN fees from fiscal years 2011 to 2017. 

The total cost to the IRS for the PTIN program for fiscal years 2024 through 2026 is projected to be $27,432,969, and dividing the total cost by the projected population of users for those fiscal years results in a cost per application of $10.79, or about $11. In addition, the costs related to a third-party contractor's activities for issuance, renewal and maintenance of PTINs, such as processing applications and operating a call center, are included in the PTIN user fee calculation, in accordance with Steele, and will be set at $8.75 per application or application for renewal, in addition to the amount charged by the government. That amount may go up, though.

Andrew Harrer/Bloomberg

"The third-party contractor was chosen through a competitive bidding process," said the IRS. "The amount of the third-party contractor portion may change in 2026 when the contract expires and will be re-computed."

The PTIN fee lawsuit has been a long-running court case dating back to at least 2012 and gained class-action status in 2016 (see story). A district court ruled against the IRS back in 2017 and the IRS temporarily suspended its PTIN system, but the case has been dragging on until it was finally decided in February of this year.