Who is a tax return preparer, and who needs a PTIN

In this lesson you will

Apply the IRC 7701(a)(36) definition and its four exceptions
Distinguish a signing preparer from a non-signing preparer
Decide whether a given staff role needs a PTIN using the IRS guidance
Explain why the preparer definition matters for the 6694 and 6695 penalties

The statutory definition

Section 7701(a)(36)(A) defines a tax return preparer as any person who prepares for compensation, or who employs one or more persons to prepare for compensation, any return of tax or claim for refund. The preparation of a substantial portion of a return or claim is treated as preparing the return or claim.

Section 7701(a)(36)(B) lists four exceptions. A person is not a tax return preparer merely because the person:

furnishes typing, reproducing or other mechanical assistance;
prepares a return or claim for refund of the employer (or an officer or employee of the employer) by whom the person is regularly and continuously employed;
prepares, as a fiduciary, a return or claim for refund for any person; or
prepares a claim for refund for a taxpayer in response to a notice of deficiency issued to that taxpayer, or a waiver of restriction after the commencement of an audit.

Circular 230 section 10.2(a)(8) adopts this definition, together with the regulation at 26 CFR 301.7701-15.

The definition matters because the preparer penalties attach to it. Section 6694(f) points to 7701(a)(36) for who can be penalized, so a person who prepares a substantial portion of a return can be liable without signing.

Signing and non-signing preparers

The IRS PTIN guidance explains that the signing tax return preparer is the individual preparer with primary responsibility for the overall substantive accuracy of the return. Other individuals who prepare all or a substantial portion of the return are non-signing preparers. Non-signing preparers still must have a PTIN, but their names are not disclosed on the return.

In a firm, the reviewer who signs is usually the signing preparer. The associate who prepared the return, and a specialist who prepared a complex schedule, can be non-signing preparers.

Who needs a PTIN

Treasury Regulation 1.6109-2 is the regulation that requires a preparer tax identification number. Circular 230 section 10.8(a) states the same rule: anyone who for compensation prepares or assists with all or substantially all of a return or refund claim must have a PTIN.

The IRS FAQ applies this through examples:

Role	PTIN required?
Associate who prepares returns that a CPA reviews and signs	Yes, regardless of who signs
Intern who only enters data and gathers documents	No
Administrative assistant who records client data	No
Bookkeeper whose records the preparer uses	No
Unpaid volunteer in a volunteer program	No
Attorney or CPA who only advises on an issue in a refund claim, when no one in the firm signs it	No, but may still be a non-signing preparer for 6694

The line is judgment. Once a staff member makes determinations that affect tax liability, the IRS treats them as assisting with preparation and they need a PTIN.

Renewal and the fee

PTINs must be renewed for each year. The IRS page for the 2027 season says anyone who prepares or assists in preparing federal returns for compensation must have a valid 2027 PTIN before preparing returns, and lists a renewal fee of $18.75. Check the page each fall because the season and fee are stated per year.

Failing to put a PTIN on a return where required is a section 6695(c) penalty, covered in a later lesson. The due dates calendar is a good place to schedule PTIN renewal for the whole staff.

Worked example

PTIN roster for the Birchwood Tax season

Birchwood Tax hires five seasonal staff for the 2027 season. The office manager must decide who needs a valid 2027 PTIN before January.

Kai, staff accountant, prepares individual returns from organizers and decides how to treat items such as dependent eligibility. He makes determinations that affect liability, so he needs a PTIN, even though a partner signs every return.
Rosa, intern, scans documents, enters W-2 data into the software exactly as shown, and checks that all pages are present. She makes no tax determinations. No PTIN.
Felix, receptionist, books appointments and collects organizers. No PTIN.
Nadia, CPA, prepares partnership K-1 allocations that flow into the individual returns. She prepares a substantial portion and is a non-signing preparer. PTIN required.
Owen, a CPA in another office of the firm, answers one research question by email for Kai and prepares no part of any return. He does not prepare or assist with all or substantially all of a return, so 10.8(a) does not require a PTIN for this work. If his advice covers an entry that is a substantial portion of the return, he can still be a non-signing preparer for 6694.

Conclusion: Kai and Nadia need PTINs at the $18.75 renewal fee shown for 2027; Rosa, Felix and Owen do not. The firm logs each PTIN and expiry in its staff file.

Self-check

Answer each question before you open the answer.

Is a person who prepares a substantial portion of a return, but does not sign it, a tax return preparer under 7701(a)(36)?
Show answer
Yes. Preparing a substantial portion is treated as preparing the return. That person is a non-signing preparer and can be liable under 6694.
Name two of the four 7701(a)(36)(B) exceptions.
Show answer
Any two of: mechanical assistance such as typing or reproducing; preparing a return for one's regular employer; preparing a return as a fiduciary; preparing a refund claim in response to a notice of deficiency or audit-related waiver.
Does an intern who only enters data from source documents need a PTIN?
Show answer
No. The IRS FAQ says interns who only enter data and gather documents are not tax return preparers and do not need a PTIN.

Sources

Back to the syllabus

Standards are paraphrased from the primary sources listed above; read the source before relying on a requirement. This lesson is training material, not professional advice. Report an error