The Internal Revenue Service announced a scheduled reduction in fees for tax professionals who prepare returns for compensation. Beginning October 16, 2025, the IRS portion of the preparer tax identification number (PTIN) fee will decrease from $11 to $10, following a biennial review by the IRS Return Preparer Office.

Tax professionals will still pay a separate $8.75 fee to a third-party contractor, bringing the total PTIN cost to $18.75. The adjustment will affect more than 900,000 individuals who the IRS projects will apply for initial or renewal PTINs during each of the next three renewal cycles. PTINs expire every December 31 and must be renewed annually.

“The IRS conducted a biennial review of the PTIN user fee in 2025 and determined that the full cost of issuing or renewing a PTIN should be reduced,” according to the agency’s announcement. The fee reduction reflects updated cost analysis that estimated the per-applicant cost for fiscal years 2026–2028 at approximately $10.18.

Anyone who prepares or helps prepare a federal tax return or claim for refund for compensation must obtain a valid PTIN from the IRS. This includes all enrolled agents, who must maintain an active PTIN to keep their enrolled status. The PTIN must appear as the identifying number on any return or claim for refund filed with the IRS.

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Impact on Tax Professionals and Business Owners

The scheduled fee reduction could lower costs for tax professionals and firms that manage multiple preparers. For larger tax preparation businesses, the savings may accumulate when renewing PTINs for several employees. While the $1 reduction per PTIN is modest, it represents a decrease in required fees across the industry.

Business owners who prepare their own returns generally do not need a PTIN unless they also prepare returns for others as a paid service. Those who hire tax professionals may potentially benefit if preparers pass along savings in their pricing.

The timing of the adjustment aligns with the upcoming renewal period, giving tax professionals time to budget for the reduced cost. PTINs for the 2026 tax season must be renewed by December 31, 2025, with the renewal period opening on October 16, 2025.

Renewal Process and Requirements

Tax professionals can renew their PTINs through the IRS online portal, which usually takes about 15 minutes to complete. The agency also offers a paper option using Form W-12, though processing time extends to about 6 weeks for paper applications. Both the IRS fee and third-party contractor fee are non-refundable.

Failure to maintain a valid PTIN can result in penalties for tax professionals. The IRS emphasizes that anyone who prepares returns for compensation must use their PTIN on all filings. This requirement helps the agency track and regulate the tax preparation industry.

The Treasury and IRS are accepting public comments on the proposed regulations through October 30, 2025, via the Federal eRulemaking Portal. Tax professionals and industry organizations can submit feedback on the fee structure and renewal process during this comment period.

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