Individual Tax Identification Number ITIN

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Individual Tax Identification Number (ITIN)

• ITIN Program Office
• Atlanta, GA

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An ITIN does NOT...

• Entitle the recipient to Social Security benefits
  or Earned Income Tax Credit (EITC) but, may be
  eligible for CTC and ACTC
• Create an inference regarding the individuals
  immigration status
• Give the individual the right to work in the U.S.

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Reasons for Form W7

• Should not apply for an ITIN if eligible for a
  SSN
• Form W-7 (Application for an ITIN) has 8 reasons
  for applying that are listed as boxes a through
  h
• Four commonly used by the immigrant population
  boxes b, c, d, e

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An ITIN is required if you are...

• A nonresident alien filing a U.S. tax return and
  not eligible for a SSN (Reason b on W-7)
• A U.S. resident (based on the days present in the
  United States) filing a U.S. tax return and not
  eligible for a SSN (Reason c on W-7)

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An ITIN is required if you are .

• A dependent of U.S. citizen/resident alien
  (Reason d on W-7)
• A nonresident spouse being shown on a tax return
  as an exemption (Reason e on W-7)
• resident spouse, too.

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Substantial Presence Test

• Determines if the applicant is a resident or
  nonresident for tax purposes
• Determines which box to mark on Form W-7 for
  reason for applying Reason b or c
• Needs dates for the applicants entrance to the
  U.S. and for any subsequent travel outside the
  U.S.

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Substantial Presence Test

• If the client meets the substantial presence
  test, the client is considered to be a resident
  for tax purposes and qualifies to file Form 1040
  instead of Form 1040NR.
• Test based on number of days the client has
  resided in the U.S.
• Special rules apply for visa holders regarding
  days that can be counted as residing in the U.S.

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Substantial Presence Test

• To meet the substantial presence test, the
  individual must be physically present in the U.S.
  for at least
• 31 days during the current year, and
• 183 days during the 3-years that includes the
  current year and the 2 years immediately before
  that

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Substantial Presence Test

• Counting
• All the days present in the current year, and
• 1/3 of the days present in the first year before
  the current year, and
• 1/6 of the days present in the second year before
  the current year

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Required ITIN Application Documentation should

• 1. Provide documentation to prove the
  applicants identity contain the applicants
  name and a photograph
• 2. Provide documentation to prove the
  applicants claim of foreign status

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ITIN Documentation

• Documentation substantiating identity must be
• Originals, or
• Copies Certified by the Issuing Agency or
  official custodian of the original record, or,
• Copies Notarized by an U.S. Notary Public legally
  authorized within his or her local jurisdiction
  to certify that the document is a true copy of
  the original.
• Copies Notarized by a Foreign Notary Public under
  the Hague Convention require an Apostille to be
  attached.

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Acceptable Documentation for ITIN application

• Changed in December 2003 to 13 items
• Passport
• U.S. drivers license
• Civil birth certificate
• National identification card (must show photo,
  name, current address, date of birth, and
  expiration date)
• Canadian applicants can use Permanent
  Residence Card or Certificate of Citizenship,
  both acceptable National ID

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Acceptable Documentation (cont.)

• Foreign drivers license
• U.S. state identification card
• Foreign voters registration card
• U.S. military identification card
• Foreign military identification card

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Acceptable Documentation (cont.)

• Visa an official authorization appended to
  a passport not the credit card.
• U.S. Citizenship and Immigration Services
  (USCIS) photo identification
• Medical records (dependents only)
• School records (dependents and/or students under
  14 y/o only)

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Documentation

• A valid passport is the only stand-alone document
• If other documentation is provided, at least two
  forms of documentation need to be provided and
  one must be a photo identification
• Exception for dependents under age 14 no
  picture required

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Current Documents

• Birth certificates do not contain expiration
  dates and are considered current.
• If document has an expiration date, expiration
  date cannot have passed.
• Medical records must be within 12 months of the
  current date (application date).
• School records are current if date displayed on
  records is not more than one year prior to date
  application is submitted.

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School Records

• Acceptable forms of school identification
• Student picture ID
• Report card
• Letter from school
• Administrative record

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Documents in Foreign Language

• Certified Translation should be provided
• Signed and sealed by official performing the
  translation
• Certifying the information on the foreign
  document
• Attach certified translation and document in
  foreign language to the ITIN application

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Return attached?

• New rules effective 12/17/03
• Require a federal tax return to be attached to
  the W-7 application unless an exception is met
• Exception needs to be documented
• Four exceptions - two most commonly seen with
  immigrant community

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Exception 1

• Passive Income third party withholding
• The applicant has an asset that generates income
  subject to information reporting OR withholding
  requirements
• Example interest bearing bank account

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Exception 1 - Documentation

• Evidence that the applicant opened an account
  with a financial institution that he/she has an
  ownership interest in the account
• Examples bank statement
• signature card
• letter from bank on
  letterhead

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Exception 2

• Third Party Reporting mortgage interest
• Individual that has secured a home loan may seek
  an ITIN to provide to their lender the lender
  reports mortgage interest on Form 1098

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Exception 2 - Documentation

• Evidence of a home mortgage loan
• Examples - loan commitment letter from the
  financial institution, a brokers listing
  agreement, or similar documentation

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When to complete Form W-7

• Exception met as soon as exception is
  determined
• No exception met when next tax return is due to
  be filed
• Delinquent returns when delinquent returns are
  ready to be filed

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Common Application Errors

• Application mailed to regular IRS Service Center
  instead of the ITIN group in Philadelphia (use
  address shown on W-7 instructions)
• Using outdated Form W-7
• Not showing an entry date into the U.S. when
  applicant is residing in the U.S.
• Not signing Form W-7

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Common Application Errors

• Name entries on Form W-7 not matching supporting
  documentation
• Sending documents that have expired
• Not marking one of the boxes for reason
  application is being submitted
• Not entering birth date in MM/DD/YYYY format
• Not showing foreign address on line 2

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Common Application Errors

• Not attaching a tax return when required
• Not attaching documentation for one of the
  exceptions when no return is attached

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Common Application Errors

• Not having documentation properly notarized when
  originals are not sent
• Not having foreign documents translated or not
  attaching the foreign document
• Spanish may not need to be translated since PSC
  ITIN Unit may have bilingual employees.

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Other Information

• If an extension for time to file or an estimated
  tax payment is sent prior to receiving the ITIN,
  write ITIN to be requested wherever the
  ITIN/SSN is requested. Extension is filed with
  Philadelphia ITIN Unit.
• ITIN taxpayer address change have taxpayer
  complete Form 8822 and mail to Philadelphia
• ITIN taxpayer name change have taxpayer notify
  ITIN unit and send appropriate documentation

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Acceptance Agent Program

• Acceptance Agents are critical to the success of
  the ITIN program because of their close proximity
  and availability to those needing ITINs for tax
  purposes.
• AAs can include educational institutions,
  financial institutions, government
  entities/military installations, volunteer
  organizations and tax practitioners.
• If you are interested in becoming an AA please
  sign the mailing list and we will send you our
  application and information packet.

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Changes in the AA Program

• Acceptance Agent Agreements expire December 31,
  2005.
• New Agreements will expire 4 years from the date
  signed.
• Application Form 13551 is required to apply for
  the AA Program.
• FBI Investigations (fingerprinting)
• Compliance checks.

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Contact Information

• Francine Prince
• Chief, ITIN Program Office
• 401 W. Peachtree St., NW
• Mail Stop 97 WI
• Atlanta, GA 30308
• [phone]
• ITINProgramOffice_at_irs.gov