PTIN Sanctions
Protecting your right to prepare returns. Safeguarding your career.
Your PTIN (Preparer Tax Identification Number) is your license to work. When the IRS threatens denial, suspension, or revocation of a PTIN, your ability to prepare returns for compensation is at risk—and so are your clients, income, software access, and reputation. At The Walton Firm—Exclusively Defending Tax Professionals, we move quickly to stabilize operations and fight the sanction.
Why PTINs get sanctioned
- Due-diligence failures & preparer penalties (IRC §§ 6694/6695, including § 6695(g) credits)
- EFIN suitability problems or unauthorized e-file use tied back to your PTIN
- Pattern issues (amended returns, ERC/EITC/CTC/HOH/AOTC anomalies)
- Data-security lapses (shared logins, breaches, identity-theft indicators)
- Failure to meet PTIN program requirements (nonrenewal, inaccurate info, unpaid user fees)
- Conduct concerns (misleading advertising, negotiating client refunds, conflicts)
What’s at stake
- Immediate bar on compensated preparation (you can’t “borrow” a colleague’s PTIN)
- Collateral exposure: OPR inquiries, EFIN monitoring, bank-product and software holds
- Client & referral loss and reputational damage that can outlast the sanction
First 24–72 hours (do this now)
- Stop “ghost prep” risk: Do not prepare for compensation without a valid PTIN.
- Lock down access: Enforce MFA, end shared credentials, export user logs.
- Preserve records: Return packets, due-diligence checklists, e-file logs, complaints, marketing.
- Centralize communications: Route all contact through counsel—no off-the-cuff calls.
- Operational plan: Paper-file/extension scripts and client messaging to control churn.
How we defend PTIN sanctions
1) Risk Map & Theory of the Case
- Identify the alleged violations, the data IRS will rely on, and parallel-track exposure (OPR/EFIN/CI).
2) Evidence Build-Out
- Due-diligence files, quality-control audits, training logs, role-based access proof, engagement letters, fee/advertising disclosures, incident/breach logs.
3) Positioning & Written Response
- Fact-first submission: correct the record, show standards compliance, and present remediation (policies, training, access controls) that supports no suspension or shortest duration.
4) Appeals & Scope Control
- Challenge defects in notice, timeliness, and penalty stacking; pursue administrative appeal where available. Keep the matter from spilling into OPR or CI.
5) Reinstatement & Monitoring
- If a sanction issues, implement a compliance plan that supports early reinstatement and smooth vendor/software reactivation.
Documents we collect fast
- PTIN history/renewals; current e-file application snapshot
- E-file transmission logs, user access records, bank-product reports
- QC & due-diligence policies (EITC/CTC/HOH/AOTC checklists), file-audit results
- WISP/data-security artifacts (MFA, encryption, VPN, device controls)
- Engagement letters, fee schedules, advertising/website screenshots
- Complaint/incident logs and corrective-action records
Walton Wins
- Suspension Avoided: Alleged § 6695(g) pattern tied to credits. We proved contemporaneous inquiries and third-party corroboration; no PTIN suspension, monitoring closed.
- Reinstatement with Conditions: Identity-theft misuse triggered invalidation. We documented unauthorized use, enforced MFA/least-privilege, completed third-party audit; PTIN reinstated.
- Scope Contained—No OPR Referral: Multi-year anomaly review. We negotiated a limited closing with training and QC enhancements; no collateral discipline.
Frequently Asked Questions
Please reach us at taxteam@thewaltonfirm.com if you cannot find an answer to your question.
Not for compensated preparation requiring a PTIN. We’ll design a compliant interim role (advisory/support) while we fight the sanction.
It can. We coordinate responses so your PTIN defense doesn’t create new exposure.
Deadlines are tight (often 10–30 days). A single, comprehensive submission beats piecemeal replies.
We frame it as unauthorized use, pair it with documented controls (unique logins, MFA, audits), and seek withdrawal or minimal sanction.
PTIN readiness checklist (self-audit)
- PTIN renewed and profile accurate (name, address, firm)
- Unique logins, MFA, least-privilege roles; monthly access reviews
- Written QC program and periodic file audits with sign-offs
- Compliant fee disclosures and advertising (no “guaranteed refunds”)
- Incident/complaint log maintained; rapid corrective-action workflow
- Consistency across PTIN, EFIN application, and firm ownership/locations
A PTIN sanction can shut down your season. Don’t let it.