In response to a federal court decision, the IRS is reducing the cost of an annual Preparer Tax Identification Number (PTIN), Accounting Today reported.

Long-running litigation against the IRS over the cost of the PTIN was resolved in January by the U.S. District Court for the District of Columbia, which ruled that that the 2023 fee of $30.75 for renewing or obtaining a PTIN was too high. The IRS will lower the fee to $10.79, plus an extra $8.75 for payment to a third-party contractor, the agency stated in its interim final rules, which will take effect on Oct. 19.

The total cost to the IRS for the PTIN program for fiscal years 2024 through 2026 is projected to be $27,432,969, according to Accounting Today. The $8.75 additional cost per application or application for renewal was set in accordance with the court’s decision, the IRS stated, in addition to the amount charged by the government.

"The third-party contractor was chosen through a competitive bidding process," the IRS stated in the interim rules. "The amount of the third-party contractor portion may change in 2026 when the contract expires and will be re-computed."