If you prepare any tax returns, you will need a PTIN beginning in 2011. A “PTIN” is a Preparer Tax Identification Number. Anyone who prepares tax returns for others needs a PTIN for any tax return he or she signs off on beginning on January 1, 2011. This new requirement appears in code section 6109(a)(4) and the following regulation: http://www.irs.gov/pub/irs-utl/td_9501.pdf
In many cases, attorneys have been exempted from the registrations and regulations which have been routine for others. But, in this case, the new PTIN must be obtained even by estate planning attorneys and other attorneys, CPAs, enrolled agents, and others who prepare the tax returns and claims for refund for others.
This applies not only to federal income tax returns (Form 1040), but also to federal estate tax returns (Form 706), federal gift and GST returns (Form 709), and all other returns (and claims for refund) such as those for corporations, partnerships, trusts, estates, foundations, etc.
While estate planning attorneys usually do not prepare their clients’ income tax returns, they are often involved in the preparation of other tax returns.
Because tax return preparation may be a very small portion of what we as estate planning attorneys do, the new requirement may have slipped past many of us.
The new PTIN is easy to obtain. You apply online by giving your relevant personal information, including licensing information. (You must also disclose any felony convictions.) Of course, there is also a fee associated with the application: $64.25. Here is a link for your convenience: http://www.irs.gov/taxpros/article/0,,id=210909,00.html
The new registration (and fee) is purportedly to allow the Service to keep track of return preparers and, like all registrations of this sort, to protect the public from the unscrupulous or incompetent.
If you file a return or claim for refund on or after January 1, 2011, without a PTIN, you may be subject to a penalty of $50 per occurrence, per code section 6695.
So, get your PTIN today and enjoy the holidays!
Stephen C. Hartnett, J.D., LL. M.
Associate Director of Education
American Academy of Estate Planning Attorneys, Inc.
6050 Santo Rd., Ste. 240
San Diego, CA 92124