October 2018 JD Supra
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Understating Form W-7 and the ITIN was published by JD Supra on 10/18/18.

An Individual Taxpayer Identification Number (ITIN) is a tax processing number issued by the IRS to foreign nationals and others who have federal tax reporting or filing requirements and do not qualify for Social Security Numbers (SSNs). ITINs are issued regardless of immigration status because both resident and nonresident aliens may have a U.S. filing or reporting requirement under the Internal Revenue Code. ITINs are for federal tax reporting only and are not intended to serve any other purpose.  IRS issues ITINs to help individuals comply with the U.S. tax laws (such as filing a Form 1040 and other tax schedules) and to provide a means to efficiently process and account for tax returns and payments for those NOT eligible for SSNs.

An ITIN does not:

  • Authorize work in the U.S.
  • Provide eligibility for Social Security benefits
  • Qualify a dependent for Earned Income Tax Credit Purposes

An Individual needs an ITIN if he/she is a:

  • Nonresident alien who is required to file a U.S. tax return
  • U.S. resident alien who is (based on days present in the United States) filing a U.S. tax return
  • Dependent or spouse of a U.S. citizen/resident alien
  • Dependent or spouse of a nonresident alien visa holder
  • Nonresident alien claiming a tax treaty benefit
  • Nonresident alien student, professor or researcher filing a U.S. tax return or claiming an exception

Why is the ITIN important now?

On 12/31/18, many ITINs that where not used not used on a federal income tax return at least once for tax years 2015, 2016 or 2017, expired.  The IRS began sending the CP-48 notice to alert Taxpayers to renew their ITIN for the US Tax Return filed in 2019. To renew an expired ITIN, a Taxpayer must submit a completed Form W-7, Application for IRS Individual Taxpayer Identification Number, and all required identification documents to the IRS.  The IRS recommends that Individuals with expired ITINs that need to file a tax return in 2019 immediately submit the ITIN renewal application to prevent potential delays in the processing of tax returns.

How may Individuals submit Form W-7?

  • Mail Form W-7 and original identification documents or copies certified by the agency that issued them to the IRS.   The IRS will review the identification documents and return them within 60 days.
  • Use a Certified Acceptance Agent (CAA) that is authorized by the IRS to help Individuals apply for an ITIN. A CAA can certify all identification documents for primary and secondary taxpayers as well as passports and birth certificates for dependents. This saves taxpayers from mailing original documents to the IRS.
  • Try to make an appointment at a designated IRS Taxpayer Assistance Center.

Don’t be a victim of your own making

Individuals ought to begin their ITIN renewal process before the 2019 tax season arrives.  The use of a CAA minimizes the risk of misplacing original documents and having to wait to receive them back from the IRS. Only original identification documents or certified copies of the documents from the issuing agency are accepted by the IRS.  Utilizing the services of an IRS CAA in lieu of sending original documentation to the IRS is a wise choice.