The IRS has announced a reduction in the Preparer Tax Identification Number (PTIN) user fee for tax professionals. Starting October 16, 2025, the fee will drop from $11 to $10, plus the existing $8.75 contractor fee, bringing the total cost to $18.75 per application or renewal.
This fee applies to anyone who prepares or signs federal tax returns for compensation, including attorneys, CPAs, enrolled agents, and registered tax return preparers. PTINs must be renewed annually and expire on December 31 of the calendar year for which they are issued.
Why the Fee Is Changing: Legal and Policy Background
The PTIN program has been the subject of ongoing litigation in recent years, primarily focused on how fees are calculated and whether they are reasonable.
- In Montrois v. United States (2019), the D.C. Circuit Court of Appeals affirmed that the IRS has the legal authority to charge a PTIN user fee. The court reasoned that the program provides a direct benefit to preparers by allowing them to use a PTIN in place of a Social Security number, reducing the risk of identity theft.
- In Steele v. United States (2023), the district court ruled that fees collected from 2011 to 2017 were excessive. The court emphasized that PTIN fees must be “reasonably related” to the cost of the service provided, and cannot include expenses that primarily benefit the IRS or the public rather than individual preparers.
This legal guidance pushed the IRS to reexamine its PTIN Cost Model and adjust fees to better reflect the actual cost of administering the program.
How the IRS Calculated the New Fee
For fiscal years 2026–2028, the IRS estimated total program costs at $28.79 million. With a projected 2.83 million PTIN applications and renewals, the cost per application comes out to $10.18.
The agency then rounded down the fee to $10 to set the new user charge, while the $8.75 contractor fee remains unchanged.
What Tax Professionals Need to Know
- New PTIN fee: $18.75 total ($10 IRS fee + $8.75 contractor fee)
- Effective date: October 16, 2025
- PTIN renewal deadline: December 31, 2025
- Fee reduction applies to both new applications and renewals
- Failure to renew a PTIN by the deadline may result in penalties and loss of authorization to prepare returns.
Final Thoughts
While the fee reduction is modest, it reflects increased scrutiny over how IRS user fees are calculated and applied. Tax professionals should continue to renew their PTINs early, stay aware of policy changes, and ensure compliance with annual filing requirements.
📌 This article is for informational and educational purposes only and does not constitute legal or tax advice. Tax professionals should consult official IRS guidance for specific requirements.
