The IRS has released proposed regulations[1] that would set the IRS portion of the preparer tax identification number (PTIN) fee per application at $21, down from the current $33 level.

The program had faced a legal challenge that temporarily suspended collection of the fee. As the preamble notes:

In Steele v. United States, 260 F. Supp. 3d 52 (D.D.C. 2017), the United States District Court for the District of Columbia concluded that the Treasury Department and the IRS lacked the statutory authority to charge a PTIN user fee and enjoined the IRS from charging a PTIN user fee. The government filed an appeal and on March 1, 2019, the United States Court of Appeals for the District of Columbia Circuit reversed the district court’s decision and lifted the injunction against charging the PTIN user fee. See Montrois v. United States, 916 F.3d 1056 (D.C. Cir. 2019) (holding that a PTIN provides tax return preparers a specific benefit by allowing them to provide an identifying number that is not a social security number on returns they prepare and stating that the permissible amount of the fee would be the same regardless of whether the specific benefit was instead the ability to prepare tax returns for compensation). The case is currently on remand in the United States District Court for the District of Columbia regarding the amount of the fee. Id. at 1068.[2]

The preamble continues to explain the new fees:

Pursuant to the guidelines in OMB Circular A-25, the IRS has re-calculated its cost of providing PTINs. The IRS has determined that the full cost of administering the PTIN program going forward has been reduced to $21 per application or renewal, plus $14.95 payable directly to a third-party contractor. The government is authorized to charge a PTIN user fee under the IOAA because, in exchange for the fee, it provides a service by issuing and maintaining PTINs, which provide tax return preparers a specific benefit by allowing them to provide an identifying number that is not a social security number on returns and to prepare returns for compensation.[3]

The new fee structure will apply to applications for or renewals of a PTIN on or after 30 days after the regulations are published as final regulations in the Federal Register.[4]

[1] REG-117138-17, April 15, 2020, https://s3.amazonaws.com/public-inspection.federalregister.gov/2020-08055.pdf?utm_campaign=pi+subscription+mailing+list&utm_source=federalregister.gov&utm_medium=email, retrieved April 15, 2020

[2] REG-117138-17, pp. 7-8

[3] REG-117138-17, p. 8

[4] Proposed Reg. §301.12(d)