The Internal Revenue Service (IRS) has announced several steps to restrict the issuance of Individual Taxpayer Identification Numbers (ITINs). According to the IRS, these changes will ensure that ITINs are issued for their intended tax administration purpose for administering the tax code. The changes are important in the immigration context because many people who cannot get Social Security Numbers depend on an ITIN for various financial matters like opening up a bank account, purchasing property and more.
What is an ITIN?
An Individual Taxpayer Identification Number (ITIN) is a nine-digit, tax processing number issued by the IRS. An ITIN always begins with the number 9 and has either a 7 or 8 as the fourth digit. Individuals must have a filing requirement and file a valid federal income tax return to receive an ITIN, unless they meet an exception.
The IRS issues ITINs to individuals who are required to have a US taxpayer identification number, but cannot obtain a Social Security Number (SSN) from the Social Security Administration (SSA). ITINs are issued regardless of immigration status because both resident and nonresident aliens may have US tax return and payment responsibilities under the Internal Revenue Code.
What is the purpose of an ITIN?
ITINs are for federal tax reporting only, and are not intended to serve any other purpose. An ITIN does not authorize work in the US or provide eligibility for Social Security benefits or the Earned Income Tax Credit. ITINs are not valid identification outside the tax system.
IRS issues ITINs to help individuals comply with the US tax laws, and to provide a means to efficiently process and account for tax returns and payments for those not eligible for Social Security Numbers.
Who needs an ITIN?
IRS issues ITINs to foreign nationals and others who have federal tax reporting or filing requirements and do not qualify for SSNs. A non-resident alien individual not eligible for an SSN, who is required to file only a US tax return to claim a refund of tax under the provisions of a US tax treaty, needs an ITIN.
If you do not have an SSN and are not eligible to obtain an SSN, but are required to provide a federal tax identification number or file a federal income tax return, you must apply for an ITIN. By law, an individual cannot have both an ITIN and an SSN.
Are ITINs valid identification?
No, ITINs are not valid identification outside the tax system, and should not be offered or accepted as identification for non-tax purposes. Since ITINs are strictly for tax processing, IRS does not apply the same standards as agencies that provide genuine identity certification.
What are the changes to ITIN application standards?
Effective immediately, each ITIN applicant must now:
· Apply using the revised Form W-7, Application for IRS Individual Taxpayer Identification Number; and
· Attach a federal income tax return to the Form W-7.
Applicants who meet an exception to the requirement to file a tax return (see the instructions for Form W-7) must provide documentation to support the exception.
What documents are used as proof of identity and foreign status?
There are now 13 acceptable documents:
· An original passport is the only document that is accepted for both identity and foreign status.
· If you do not have a passport, you must provide a combination of current documents that contain expiration dates, show your name and photograph, and support your claim of foreign status.
IRS will accept a combination of two or more of the following documents, in lieu of a passport:
· National identification card (must show photo, name, current address, date of birth, and expiration date)
· US driver's license
· Civil birth certificate
· Foreign driver's license
· US state identification card
· Foreign voter's registration card
· US military identification card
· Foreign military identification card
· US Citizenship and Immigration Services (USCIS) photo identification
· Medical records (dependents only)
· School records (dependents and/or students only)
How do I apply for an ITIN?
Use the December 2003 revision of Form W-7, Application for IRS Individual Taxpayer Identification Number to apply. Attach a valid federal income tax return unless you qualify for an exception, and include your original or certified proof of identity documents.
Because you are filing your tax return as an attachment to your ITIN application, you should not mail your return to the address listed in the Form 1040, 1040A or 1040EZ instructions. Instead, send your return, Form W-7 and proof of identity documents to the following address (also listed in the Form W-7 instructions):
Internal Revenue Service
Philadelphia Service Center
ITIN Unit, P.O. Box 447
Bensalem, PA 19020
You may also apply using the services of an IRS-authorized Acceptance Agent or visit an IRS Taxpayer Assistance Center in lieu of mailing your information to the IRS in Philadelphia. TACs in the United States provide in-person help with ITIN applications on a walk-in or appointment basis. Applicants outside the United States should contact an overseas the IRS office to find out if that office accepts Form W-7 applications. The IRS's ITIN Unit in Philadelphia issues all numbers by mail.
When should I apply for an ITIN?
You should complete Form W-7 as soon as you are ready to file your federal income tax return, since you need to attach the return to your application.
If you meet one of the exceptions and do not need to file a return, submit Form W-7, along with the documents required to meet your purpose for needing an ITIN, as soon as possible after you determine that you are covered by that exception.
You can apply for an ITIN any time during the year; however, if the tax return you attach to Form W-7 is filed after the return's due date, you may owe interest and/or penalties. You should file your current year return by the April 15 deadline to avoid this.
When will I receive my ITIN?
If you qualify for an ITIN and your application is complete, you will receive a letter from the IRS assigning your number within four to six weeks. The IRS is changing their practice of issuing an ITIN card to an authorization letter to avoid any possible similarities with a Social Security Number card. Current ITIN holders' cards will not be replaced; they should continue to use the numbers previously issued when they need to supply identifying numbers for tax purposes.
If you have not received your ITIN or other correspondence six weeks after applying, you should call the IRS to find out the status of your application.
For help and additional information, call the IRS toll-free at 1-800-829-1040, or by making an appointment at IRS Taxpayer Assistance Centers (TACs) in the United States, which provide in-person help with ITIN applications on a walk-in or appointment basis. Applicants outside the United States may contact an overseas IRS office to find out if that office accepts Form W-7 applications. You can also use the services of an IRS-authorized Acceptance Agent (List of Acceptance Agents).