Tax professionals received a bit of good news this week: the IRS announced it is lowering the Preparer Tax Identification Number (PTIN) renewal fee to $10 (plus an $8.75 contractor fee). This change took effect October 16, 2025, and it's still the fee in place as the 2027 renewal window opens this month. While the reduction may seem small, it caps off nearly a decade of litigation over whether the IRS was charging more than the PTIN program actually costs.
On September 30, 2025, Treasury and the IRS issued interim final regulations (T.D. 10035) cutting the IRS portion of the PTIN user fee from $11 to $10 per application or renewal. A companion proposed rule (REG-108673-25) runs the change through full notice and comment to make it permanent.
The $8.75 third-party contractor fee, paid separately to the company that processes PTIN applications and runs the support line, didn't change. That puts the total cost to apply for or renew a PTIN at $18.75, down from $19.75.
The IRS built the new number from a cost model covering fiscal years 2026 through 2028: about $28.8 million in projected program costs against roughly 2.83 million expected applications, working out to $10.18 per application before rounding down to $10.
A dollar off the fee isn't the story. The story is why the IRS is now publishing this level of cost detail at all, and PTIN is just one piece of a broader identity-credential push the IRS has been running for preparers, alongside multi-factor authentication and IP PIN requirements.
PTIN fees have been litigated since 2014, when a class action challenged the IRS's authority to charge them in the first place. A district court agreed in 2017 and enjoined the fee entirely; the D.C. Circuit reversed that in Montrois v. United States, confirming the IRS can charge a PTIN fee, but sent the case back to decide whether the amount charged was excessive.
In 2023, the district court ruled in Steele v. United States that fees collected from 2011 through 2017 were too high, and drew a hard line: a PTIN fee has to be reasonably related to the IRS's actual cost of providing the PTIN, not padded with costs tied to the agency's own general compliance or oversight goals. The $10 figure is the IRS's attempt to calculate a fee that survives that standard, and the rule says so directly.
The fee change itself saves most preparers about a dollar a year, not enough to change anyone's budget. What's worth knowing is the exposure on the other side: skipping a valid PTIN, or leaving it off a return you're paid to prepare, triggers a penalty under IRC Section 6695(c), currently $65 per failure with a $33,000 annual cap per preparer. The $10 fee is cheap insurance against a penalty two orders of magnitude larger.
The renewal form itself is worth a second look too: Form W-12 asks whether your practice has a written information security plan on file, which Bizora's guide to secure document management covers in full.
A firm with ten preparers saves roughly $10 a year from this specific change, which won't move a budget line. It's a better moment to confirm every preparer in the building actually renewed under the new cycle, since the fee amount was never the real compliance risk; a lapsed PTIN on a signed return is. Firms tracking PTIN status across several preparers alongside other IRS credentials, like CAF authorizations through Tax Pro Account, increasingly need one place to manage all of it rather than a spreadsheet nobody opens until renewal season.
The Steele litigation forced a shift in how the IRS has to justify this fee, and that shift outlasts any single rate. Future biennial reviews will keep publishing cost models rather than round numbers, and the contractor's $8.75 piece is due for its own recalculation when the current processing contract expires in 2026, which is a second place this total could move again before the fee amount's reasonableness is fully settled on appeal.
The 2027 PTIN renewal window opened in mid-October 2026. Every PTIN issued or renewed for 2026 expires December 31, 2026 regardless of when during the year it was renewed, so there's no advantage to waiting. The $10 IRS fee is expected to hold through the 2026-2028 cost model period; the contractor's $8.75 portion is the piece most likely to move once its current contract is rebid.
Try Bizora today to stay ahead of IRS regulatory updates and compliance changes, with real-time insights tailored for tax professionals.
Bizora AI turns hours of manual research into seconds, with every answer backed by primary source citations. Start your 7-day free trial. No credit card required.
Start Free TrialThe total cost to apply for or renew a PTIN is $18.75: a $10 fee paid to the IRS plus an $8.75 fee paid separately to the third-party contractor that processes applications. That's down from $19.75 before October 16, 2025.
October 16, 2025, the start of the renewal cycle for 2026 PTINs. The rule was issued as an interim final regulation specifically so the lower fee would be in place before that cycle opened.
A 2023 federal court ruling in Steele v. United States found that PTIN fees charged from 2011 through 2017 exceeded what the IRS could justify under the law governing federal user fees. The IRS's 2025 biennial cost review, built to meet that standard, determined $10 per application reflects the actual cost of providing a PTIN.
Yes. Anyone who prepares or helps prepare a federal tax return or claim for refund for compensation must have a valid PTIN and include it on every return filed.
A preparer who signs a return without a valid PTIN faces a penalty under IRC Section 6695(c): $65 per failure, capped at $33,000 per preparer per calendar year. That cap makes the $10 renewal fee a small cost next to the risk of letting a PTIN lapse.
Yes. The $8.75 contractor fee is due for recalculation when the current processing contract expires in 2026, and the broader question of what counts as a reasonable PTIN fee amount remains part of ongoing litigation. Either one could move the total again.
It's in effect now under an interim final rule, which takes effect immediately. The companion proposed rule is still working through public comment to make the $10 fee permanent, so the amount could still be adjusted based on that process, though the IRS has signaled no change is currently expected through 2028.
Related articles