2024-10631. Preparer Tax Identification Number (PTIN) User Fee Update

AGENCY:

Internal Revenue Service (IRS), Treasury.

ACTION:

Final rule.

SUMMARY:

This document contains final regulations relating to the imposition of certain user fees on tax return preparers. The final regulations adopt without change the text of interim final and proposed regulations that reduced the user fee to apply for or renew a preparer tax identification number (PTIN) from $21 to $11. The final regulations affect individuals who apply for or renew a PTIN. The Independent Offices Appropriation Act of 1952 authorizes the charging of user fees.

DATES:

Effective date: These regulations are effective on June 14, 2024.

Applicability date: For date of applicability, see § 300.11(d).

FOR FURTHER INFORMATION CONTACT:

Concerning the final regulations, Jamie Song at [phone]; concerning cost methodology, Michael A. Weber at [phone] (not toll-free numbers).

SUPPLEMENTARY INFORMATION:

Background

This document contains amendments to 26 CFR part 300—User Fees. On October 4, 2023, the Department of the Treasury (Treasury Department) and the IRS published in the Federal Register (88 FR 68525) a notice of proposed rulemaking (proposed regulations) by cross-reference to an interim final rule (REG-106203-23) proposing amendments to regulations under 26 CFR part 300. On the same date, the Treasury Department and the IRS published in the Federal Register (88 FR 68456) an interim final rule (TD 9980) that reduced the PTIN user fee from $21 per application or application for renewal to $11, plus the fee payable directly to a third-party contractor. The interim final rule and the proposed regulations took into account the February 2023 memorandum opinion of the United States District Court for the District of Columbia in Steele v. United States, 657 F.Supp.3d 23 (D.D.C. 2023). The preamble to the interim final rule contains a detailed explanation of the legal background and user fee calculations regarding the amendments to these regulations. No public hearing was requested or held, and no comments were received on the proposed regulations. These final regulations therefore adopt the text of the interim final rule and proposed regulations without change.

Special Analyses

I. Regulatory Planning and Review

The OMB's Office of Information and Regulatory Analysis has determined that these final regulations are not significant and are not subject to review under section 6(b) of Executive Order 12866, as amended.

II. Regulatory Flexibility Act

Pursuant to the Regulatory Flexibility Act (5 U.S.C. chapter 6), it is hereby certified that these final regulations will not have a significant economic impact on a substantial number of small entities. Accordingly, a regulatory flexibility analysis is not required. These regulations affect all individuals who prepare or assist in preparing all or substantially all of a tax return or claim for refund for compensation. Only individuals, not businesses, can have a PTIN. Thus, the economic impact of these regulations on any small entity generally will be a result of an individual tax return preparer who is required to have a PTIN owning a small business or a small business otherwise employing an individual tax return preparer who is required to have a PTIN. The Treasury Department and the IRS estimate that approximately 847,555 individuals will apply annually for an initial or renewal PTIN. Although these regulations will likely affect a substantial number of small entities, the economic impact on those entities is not significant. These regulations establish an $11 fee per application or application for renewal (plus the fee payable directly to the third-party contractor), which is a reduction from the previously established fee, and will therefore not have a significant economic impact on small entities. Accordingly, a regulatory flexibility analysis is not required.

III. Unfunded Mandates Reform Act

Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) requires that agencies assess anticipated costs and benefits and take certain other actions before issuing a final rule that includes any Federal mandate that may result in expenditures in any one year by a State, local, or Tribal government, in the aggregate, or by the private sector, of $100 million in 1995 dollars, updated annually for inflation. These final regulations do not include any Federal mandate that may result in expenditures by State, local, or Tribal governments, or by the private sector in excess of that threshold.

IV. Executive Order 13132: Federalism

Executive Order 13132 (Federalism) prohibits an agency from publishing any rule that has federalism implications if the rule either imposes substantial, direct compliance costs on State and local governments, and is not required by statute, or preempts State law, unless the agency meets the consultation and funding requirements of section 6 of the Executive order. These final regulations do not have federalism implications and do not impose substantial direct compliance costs on State and local governments or preempt State law within the meaning of the Executive order.

V. Submission to Small Business Administration

Pursuant to section 7805(f) of the Code, the notice of proposed rulemaking and the interim final rule that preceded these final regulations was submitted to the Chief Counsel for the Office of Advocacy of the Small Business Administration for comment on its impact on small business. No comments were received on the proposed regulations or the interim final rule.

VI. Congressional Review Act

Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.), the Office of Information and Regulatory Affairs designated this rule as not a major rule, as defined by 5 U.S.C. 804(2).

Drafting Information

The principal author of these regulations is Jamie Song, Office of the Associate Chief Counsel (Procedure and Administration). Other personnel from the Treasury Department and the IRS participated in the development of the regulations.

List of Subjects in 26 CFR Part 300

• Estate taxes
• Excise taxes
• Fees
• Gift taxes
• Income taxes
• Reporting and recordkeeping requirements

PART 300—USER FEES

Accordingly, the interim rule amending 26 CFR part 300, which was published at 88 FR 68456 on October 4, 2023, is adopted as final without change.

Douglas W. O'Donnell,

Deputy Commissioner.

Approved: April 28, 2024.

Aviva R. Aron-Dine,

Acting Assistant Secretary of the Treasury (Tax Policy).