IRS issues prop. regs. on use of PTINs after 2010.

• Author: Nevius, Alistair M.
• Position: Preparer tax identification numbers

On March 24, the IRS issued proposed regulations that would require paid return preparers to use a preparer tax identification number (PTIN) on all tax returns after December 31, 2010 (REG-134235-08).

The proposed regulations are the first guidance issued by the IRS under its proposed plan to require registration of all paid return preparers. As part of that proposed plan, all paid return preparers would be required to obtain a PTIN from the IRS. (For more on this proposal, see News Notes, "IRS Announces Mandatory Registration, Testing, and CPE for Return Preparers," 41 The Tax Adviser 156 (March 2010).)

Sec. 6109(a)(4) authorizes the IRS to require tax return preparers to furnish identifying numbers on any returns or refund claims they prepare. Regs. Sec. 1.6109-2(a) (1) currently requires preparers to use either their Social Security number or a PTIN. The proposed regulations would change this requirement by no longer allowing the use of Social Security numbers; paid return preparers would be required to use a PTIN on all tax returns and refund claims.

The proposed regulations do not establish other elements of the proposed return regulation plan. Notably, they do not establish the requirements to become a registered tax return preparer.

The rules in the proposed regulations would become effective when they are finalized. The IRS recognizes that it may not have implemented its proposed return preparer registration plan by that time, so the proposed regulations allow the IRS to prescribe exceptions or transition rules to allow individuals to receive PTINs before the return preparer registration plan is fully implemented.

The proposed regulations provide a transition rule for returns due for tax periods that end before January 1, 2011, where the return is not filed until after December 31, 2010 (e.g., Forms 1040 for calendar year 2010). On those returns, preparers should use the identifying number prescribed on the form they are filing or its instructions.

The proposed regulations say that all tax return preparers must apply for a PTIN "at the time and in the manner" that will be prescribed in further IRS guidance or forms and instructions. The proposed regulations authorize the IRS to charge a fee in connection with the issuance or renewal of a PTIN.

The preamble to the proposed regulations says that after December 31, 2010, in order to obtain a PTIN an individual will have to be a CPA, attorney, enrolled agent, or registered return...