The Internal Revenue Service released proposed regulations on Thursday that would establish a $50 fee for individuals who apply for a preparer tax identification number. 

Proposed regulations that were issued by the IRS in March would require certain tax return preparers to obtain a PTIN (see IRS Proposes Regulations on Preparer ID Numbers). The IRS said it is still working to finalize those proposed regulations, which are the first of a series of steps planned to increase oversight of federal tax return preparation.

The proposed regulations (REG-139343-08) would establish a fee of $50, payable to the IRS, to cover technology costs, as well as compliance and outreach efforts associated with the new PTIN program. The proposed regulations would also provide for an additional fee (expected to be substantially lower than $50) to be charged by the third-party vendor chosen to operate the new online system. That fee amount is expected to be announced soon, as well as additional details about the launch of a new online application system. The fees could change in future years as program costs are reevaluated, the IRS cautioned.

Agencies are directed by the Office of Management and Budget to charge user fees to recover the cost of services that convey special benefits beyond those available to the general public, such as the authority to prepare federal tax returns for compensation.     

Tax professionals and other interested parties have until Aug. 23, 2010, to submit comments regarding the proposed regulations. The official publication date of the proposed regulations is July 23.

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