What Your Clients Need to Know About Individual Taxpayer Identification Numbers

You may have clients who need an Individual Taxpayer Identification Number (ITIN). Here is a summary of what’s involved in applying for or renewing an ITIN. You can serve as your client’s trusted advisor by educating them on ITINs and passing along this information to them.

What is an ITIN?

An Individual Taxpayer Identification Number (ITIN) is a U.S. tax processing number issued by the IRS. The IRS issues ITINs to individuals who have a U.S. tax filing obligation, but who do not have and are not eligible to obtain a Social Security number (SSN) from the Social Security Administration (SSA).

ITINs are issued regardless of immigration status, as both resident and non-resident foreigners may have a requirement to file tax returns per the Internal Revenue Code.

ITINs are used for tax purposes only. An ITIN does not authorize work in the United States, or provide eligibility for Social Security benefits or the Earned Income Tax Credit. An ITIN is not valid for identification outside the tax system and does not change immigration status. The applicant must enter his ITIN in the space provided for the SSN when completing and filing a federal tax return.

How to Apply for an ITIN

You must file Form W-7, Application for IRS Individual Taxpayer Identification Number, with your federal tax return. It must also include original documentation proving your identity and foreign status. Send your forms and documents to:

Internal Revenue Service – Austin Service Center
ITIN Operation – P.O. Box 149342, Austin, TX 78714-9342

The IRS established a process to ensure that original documents are returned to applicants. The documents will be returned using the mailing address on the application through U.S. standard mail within 60 days after receipt and processing of Form W-7.

You may apply for an ITIN at any time during the year when you have a filing or reporting requirement. At a minimum, you must complete Form W-7 when you are ready to file your federal tax return.

If you do not wish to send your original documents by mail and risk losing them, you may request the services of an IRS certified acceptance agent (CAA) or visit an IRS Taxpayer Assistance Center (TAC). U.S. Taxpayer Assistance Centers provide help in person and are available by appointment only.

You will usually receive a letter from the IRS assigning your tax ID number within seven weeks if you qualify for an ITIN and your application is complete. The IRS ITIN office in Austin issues all numbers through the mail.

Original Documentation

There are 13 acceptable documents that the IRS accepts as proof of identity and foreign status. Each document must be recent and contain an expiration date. The IRS will accept documents issued within 12 months if the expiration date is not available. The documents must also show your name, photo and support your claim of foreign status. The 13 acceptable documents are:

• Passport
• U.S. driver’s license
• Visa
• National identification card
• Foreign military identification card
• Foreign voter’s registration card
• Civil birth certificate (required for dependents under 18 years of age)
• Medical records (dependents only – under 6)
• School records (dependents only – under 14, under 18 if a student)
• Foreign driver’s license
• U.S. state identification card
• U.S. military identification card
• U.S. Citizenship and Immigration Services (USCIS) photo identification

A passport is the only document that proves both identity and foreign status. For dependents, the passport must have an entry date to be a stand alone document, unless the dependent is from Canada, Mexico or military abroad. If a passport is not presented, a combination of two or more documents must be presented to prove identity and foreign status.

IRS Taxpayer Assistance Centers

Primary, secondary and dependent individuals may submit W-7 applications in person (with original documents) at designated IRS TACs. The TACs will certify only original passports and national ID cards.

Service at the TAC is by appointment only. Appointments can be scheduled by calling 844-545-5640. See IRS.gov for a list of designated TACs that offer ITIN document authentication services.

ITIN Renewals

Due to the PATH Act, ITINs that have not been used on a federal tax return at least once in the last three consecutive years will expire on Dec. 31, 2018. In addition, ITINs with middle digits 73, 74, 75, 76, 77, 81 or 82 will also expire at the end of 2018.

This will affect more than 2.7 million taxpayers. Those who expect to file a tax return in 2019 must renew their ITINs as soon as possible.

Who Needs to Renew?

Taxpayers with expired ITINs who plan to file a tax return in 2019 must renew. ITINs with middle digits 73, 74, 75, 76, 77, 81 or 82 must be renewed even if the taxpayer has used it in the last three years.

Earlier this summer, the IRS mailed a CP-48 notice to those affected taxpayers. The notice explains the steps to follow to renew the ITIN. ITINs with middle digits of 70, 71, 72, 78, 79 or 80 have previously expired. Taxpayers with these ITINs can renew them at any time.

Taxpayers have the option to renew ITINs for their entire family at the same time. Those who have received a letter of renewal from the IRS may elect to renew the family’s ITINs together, even if a family member has an ITIN with middle digits that has not been identified for renewal. Family members include the taxpayer, spouse and dependents on the tax return.

How to Renew

To renew an ITIN, the taxpayer must complete Form W-7 and send in all required documentation. Taxpayers who submit From W-7 to renew their ITIN are not required to attach a tax return.

There are three ways to send the W-7 application packet. Taxpayers may:

1. Submit Form W-7, along with original identification documents, to Austin, TX. The IRS will review the identification documents and return them within 60 days.
2. Work with an IRS CAA who can authenticate all identification documents for primary and secondary taxpayers, verify that an ITIN application is correct before submitting it to the IRS, and authenticate dependent passports and birth certificates. This prevents taxpayers from mailing in original documents to the IRS.
3. Call and make an appointment at an IRS TAC to authenticate the identity of each applicant in person. This avoids sending the original identification documents by mail to the IRS. Applicants must bring a completed Form W-7 along with all required identification documents. Appointments can be scheduled by calling 844-545-5640.

What Happens if You Forget to Renew?

Federal tax returns filed in 2019 with an expired ITIN will be processed. However, certain tax credits and any deductions associated with the expired ITIN will be disallowed.

Taxpayers will receive a letter informing them about the change in their tax return and their need to renew their ITIN. Once the ITIN is renewed, the applicable credits and deductions will be reinstated, and refunds will be issued.

Editor’s note: This article was originally published on the Latino Tax Professional Association’s blog. Access a Spanish language version of this article.