ITIN - Individual Taxpayer Identification Number Explained
What Is ITIN?
An Individual Taxpayer Identification Number (ITIN) is a tax processing number issued by the Internal Revenue Service. It is a nine-digit number that always begins with the number 9 and has a range of 70-88 in the fourth and fifth digit. Effective April 12, 2011, the range was extended to include 900-70-0000 through 999-88-9999, 900-90-0000 through 999-92-9999 and 900-94-0000 through 999-99-9999. IRS issues ITINs to individuals who are required to have a U.S. taxpayer identification number 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 because both resident and nonresident aliens may have a U.S. filing or reporting requirement under the Internal Revenue Code.
Individuals must have a filing requirement and file a valid federal income tax return to receive an ITIN unless they meet an exception.
Who Needs One?
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 a U.S. tax return only to claim a refund of tax under the provisions of a U.S. tax treaty needs an ITIN.
Other examples of individuals who need ITINs include:
· A nonresident alien required to file a U.S. tax return
· A U.S. resident alien (based on days present in the United States) filing a U.S. tax return
· A dependent or spouse of a U.S. citizen/resident alien
· A dependent or spouse of a nonresident alien visa holder
How Do You Get ITIN?
To obtain an ITIN, you must complete IRS Form W-7 (http://www.irs.gov/pub/irs-pdf/fw7.pdf), IRS Application for Individual Taxpayer Identification Number (PDF).
The Form W-7 requires documentation substantiating foreign/alien status and true identity for each individual. You may either mail the documentation, along with the Form W-7, to the address shown in the Form W-7 Instructions, present it at IRS walk-in offices or process your application through an Acceptance Agent authorized by the IRS.
Acceptance Agents are entities (colleges, financial institutions, accounting firms, etc.) who are authorized by the IRS to assist applicants in obtaining ITINs. They review the applicant’s documentation and forward the completed Form W-7 to IRS for processing.
With an office in Singapore, our firm is an Acceptance Agent.
Standard Operating Procedures of Advanced American Tax
- Introduction – In an effort to assign a valid reporting number to all nonresident aliens who may be subject to United States tax laws but not eligible for a social security number, the Internal Revenue Service (IRS) has developed a process to issue an “Individual Taxpayer identification Number” (ITIN) to such individuals. To assist the IRS in obtaining the documentation required to assign an ITIN, our firm has been designated as a “Certified Acceptance Agent.”
- Purpose – The purpose of these Standard Operating Procedures is to set forth the functions and activities required of a Certified Acceptance Agent. As indicated in this documentation, the role of a Certified Acceptance Agent is fulfilled by assisting an individual in completing the necessary documentation and submitting, in a manner prescribed by the IRS, a Form W-7 to the IRS on behalf of the individual with supporting documentation.
o Applicant – An applicant refers to the foreign individual applying for an ITIN.
o Certifying Acceptance Agent – A Certifying Acceptance Agent is an organization and/or entity authorized by the Internal Revenue Service to act on behalf of a foreign individual with respect to those persons who need to obtain an Individual Taxpayer Identification Number. Our firm is a Certifying Acceptance Agent.
o Documentary Evidence – Documentary Evidence refers to documents that prove both the identity and immigration status of the foreign individual. The foreign individual’s Passport and I-94 are considered documentary evidence.
o Foreign Individual – A foreign individual is an individual who is not a citizen or a legal permanent resident (green card holder) of the United States.
o IRS – Internal Revenue Service.
o ITIN – Individual Taxpayer Identification Number.
o Properly Certified Copy – A Properly Certified Copy refers to documentary evidence properly certified to be true and complete copies of the original document. In the case of a document issued by a person in a foreign country, the certification is proper only if it is certified by the agency that issued the document, by an embassy or consulate office of that country, by a United States embassy or consulate office or by a United States Notary Public. Properly Certified Copy also refers to documents notarized by a Notary Public who is commissioned in the United States and who is acting within his or her legal authority with respect to the notarization.
o Responsible Party – Derren Joseph is the designated RP for our firm
o SOP – Standard Operating Procedure.
o SSN – Social Security Number.
- General Procedure:
o Applicant contacts Derren Joseph, as the Responsible Party, and an appointment is made
o Responsible Party emails the applicant with a list of acceptable documentation to bring with them to the appointment
o At the appointment, Responsible Party assists the applicant in the completion of the ITIN application form (W-7)
o At the beginning of the application process for an ITIN, the Responsible Party informs the applicant as follows:
1. The ITIN cannot be used to claim the earned income tax credit under section 32 of the Internal Revenue Code;
2. The possession of an ITIN does not change the applicant’s immigration status or entitle the applicant to legal employment in the United States;
3. The ITIN does not take the place of a SSN or qualify the applicant for Social Security Benefits;
4. The applicant may become eligible for a SSN and the circumstances under which this may be the case;
5. If the applicant may be eligible for a SSN at a later date, the ITIN can no longer be used and the applicant must apply for a SSN from the Social Security Administration;
6. The Responsible Party must fully explain the application process to the applicant, the information required by the form and instructions, the role of the Certifying Acceptance Agent, the fact that the form is signed under penalties of perjury, and the consequences of making false statements or providing incorrect or false documentation.
o Both the Responsible Party and the applicant sign the Form W-7 and includes the original or properly certified copies of the documentary evidence.
1. The Responsible Party must obtain the necessary information from the applicant either during an interview or in another way that is convenient to the applicant and reasonable for the Responsible Party.
2. During the interview with the applicant, the Responsible Party must review the application for accuracy and review the documentary evidence to ascertain its authenticity as an original or as a properly certified copy of an original and to determine that the original or copy has not been altered.
3. The Responsible Party will only accept originals or copies thereof which are properly certified to be true and complete copies of the original document. In the case of a document issued by a person in a foreign country, the certification is proper only if it is certified by the agency that issued the document, by an embassy or consulate office of that country, by a United States embassy or consulate office or by a United States Notary Public. They will also accept documents notarized by a Notary Public who is commissioned in the United States and who is acting within his or her legal authority with respect to the notarization.
4. The Responsible Party must include the interview proceedings with the applicant, in an interview file.
o Responsible Party completes and signs the Form W-7 (COA) Certificate of Accuracy
o Responsible Party ensures that all supporting documents are electronically copied and stored in the client folder
o Fed ex the W-7 and Certification to the IRS within five business days to –
· ITIN Operation
· PO Box 149342
· Austin, TX 78714-9342
For courier or private delivery service (e.g., FedEx, UPS, DHL), use the following address:
Internal Revenue Service
Mail Stop 6090-AUSC
3651 S. Interregional, Hwy
Austin, TX 78741-0000
o Upon receipt of Form 9844 (showing the ITIN), email applicant notification of receipt of ITIN, file in applicants file
- Completion of W-7 Forms
o All information should be provided as completely as possible by the applicant.
o IRS documentation codes must be inserted in the shaded box entitled ‘FOR IRS USE ONLY’ on Form W-7. The codes identify the documentary evidence listed on the certification to be attached to Form W-7.
o In the Acceptance Agent Section, Responsible Party should complete all information in this section using his/her name and title. Only a Responsible Party may sign this form.
o Our firm’s Employer Identification Number (EIN) must be included in the EIN box in the ‘Acceptance Agent’ section of the form.
- Form W-7 (COA) Certification – Form W-7 (COA) must be attached to each W-7 application. This certification documents supporting document, identity and foreign status reviewed by the Responsible Party and that the information appears accurate and complete.
- Supporting Documentation –
o The Responsible Party must obtain for review the documentary evidence in support of an ITIN applicant’s claim of alien status and identity.
o Acceptable documents are: – IRS has streamlined the number of documents the agency will accept as proof of identity to obtain an ITIN. There are now 13 acceptable documents.
· A copy of an UNEXPIRED 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 – we accept documents issued within 12 months of the application if no expiration date is normally available. The documents must also show your name and photograph, and support your claim of foreign status.
· IRS will accept copies of a combination (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)
· U.S. driver’s license
· Civil birth certificate (required for dependents under 18 years old)
· Foreign driver’s license
· U.S. state identification card
· Foreign voter’s registration card
· U.S. military identification card
· Foreign military identification card
· U.S. Citizenship and Immigration Services (USCIS) photo identification
· Medical records (dependents – under 14, under 18 if a student)
· School records (dependents – under 14, under age 18 if a student)