What is an ITIN?

ITIN

An ITIN, also known as Taxpayer Identification Number, is a tax processing number. The ITIN can only be issued through a Certifying Acceptance Agent or the IRS. It is issued irrespective of migration status because both local and non-resident aliens may have a U.S reporting or filing requirement under the Internal Revenue Code. This nine-digit number is only available to people who are obliged to have a taxpayer identification number for tax purposes, but who don’t have or not qualified to get a SSN or Social Security Number from the Social Security Administration or SSA.

Who can apply for an ITIN?

Spouse of United States citizen or resident alien

United State resident alien or non-resident alien filing a U.S tax return (not prior to filing, but at the time of filing)

Dependent of U.S. resident alien or citizen

Non-resident alien professor, student or researcher filing a U.S. tax return or claiming an exception

Non-resident alien required to get ITIN to declare tax treaty benefit

Spouse or dependent of a non-resident alien holding a U.S. visa

Individuals who are partners of a U.S or foreign partnership that invests in the U.S and those who possess assets that create income subject to IRS information reporting or/and federal tax withholding requirements.

Individuals who are getting distributions during the present year of income like pensions, royalties, annuities, dividends, etc and are obliged to give an ITIN to withholding agent for the purpose of tax withholding or/and reporting requirements

Resident aliens for tax purposes who have acquired an interest bearing bank deposit account

Individuals who have acquired an interest bank deposit account that creates income which is efficiently affiliated to their U.S. business or trade that produces income subject to IRS information reporting or/and withholding of Federal income tax

How does a taxpayer apply for an ITIN?

A taxpayer who is in need of ITIN must complete Form W-7 (Application for IRS Individual Taxpayer ID Number). After completing the form, a taxpayer needs to submit it to the IRS or Internal Revenue Service together with a valid U.S. Federal Income Tax Return (unless exceptions apply) and other needed supported files, which validates the person’s foreign status and identity. However, take note that if the application is filed by the individual, AUTHENTICATE supporting documentation or certified copies must be sent (approved by the original issuing company; notarized copy is not a certified copy). Supporting documentation must prove identity and foreign status. Passport is the only stand-alone document that will prove both foreign status and identity. In case a passport is not presented, then a combination of other existing documents (that contain expiration dates, show the photograph and name and support the claim of foreign status) must be provided. At least one document submitted must contain the latest photograph (unless dependent is under the age of 14); if student (under the age of 18). At least one document must prove foreign status and at least one document must prove identity (if passport is not presented).

How long is ITIN valid for?

On June 30, 2014, the IRS or Internal Revenue Service posted a change to the time of validity of ITINs. If you file your tax return with the use of your ITIN at least one (1) during the last five (5) years, your ITIN will not expire. But, if you acquired ITIN and it was not utilized on any tax returns for the five (5) consecutive years, it will automatically expire in five (5) years. If you would need to re-apply again, the IRS will not initiate deactivating ITINs until 2016. This latest rule applied to all ITINs, including those issued after January 1, 2013.

List of Documents that Prove FOREIGN STATUS when Applying for ITIN:

Foreign Military ID Card

Visa issued by U.S Department of State

Passport (the only stand-alone document)

Foreign Voter’s Registration Card

United States Citizenship and Immigration Services Photo Identification

Foreign Voter’s Registration Card

National ID Card (must contain photograph, name, address, expiration date and date of birth; and must be current)

Medical Records (valid for dependent’s only –under 14 years of age (under 18 years old age if a student). These may be utilized to build foreign status if document is foreign
Civil Birth Certificate (only if document is foreign)

School Records (valid for dependent’s only – under 14 years of age (under 18 years of age if a student). These may be utilized to build foreign status if document is foreign

List of documents that prove IDENTITY when applying for ITIN:

United States Citizenship and Immigration Services Photo Identification

Visa issued by U.S Department of State

Passport (the only stand-alone document)

United States Driver’s License

Foreign Military ID Card

United States Military ID Card

National Identification Card (must contain photograph, name, address, expiration date and date of birth; and must be current)

United States State ID Card

Civil Birth Certificate

School Records (valid for dependent’s only – under 14 years of age (under 18 years of age if a student). These may be utilized to build foreign status if document is foreign

Medical Records (valid for dependent’s only –under 14 years of age (under 18 years old age if a student). These may be utilized to build foreign status if document is foreign

Foreign Voter’s Registration Card

Note: Original documentation submitted for a dependent MUST all include a Civil Birth Certificate (unless a passport is submitted).

How long before I receive my ITIN?

The standard time to receive an ITIN is about three to four weeks. Applications mailed during peak handing out times (usually from January 15 to April 30) or from abroad may take more or less eight to ten weeks.

Who is a Certifying Acceptance Agent or CAA?

A CAA, also known as Certifying Acceptance Agent, is an individual who pursuant to a written agreement with the IRS. This person is not only authorized to help an alien individual and other foreign people in getting ITINs, but also to confirm that he/she checked and accepted original supporting documentation, purging the need o send original documents to the Internal Revenue Service. Starting January 2013, ITIN applications for dependents only (not chief taxpayer and her/his spouse) must be presented with original documents or copies of authenticated documents given by the issuing agency, even if ITIN application for dependent (s) is all set by a CAA.

At Acceptance Agent Services, we are considered as the Certifying Acceptance Agents. We can file your ITIN application without you losing possession of your passport or other pertinent identify documentation. We also review the originals, make certified copies and return your documents back in an instant.

 

FAQ on ITIN
The Individual Taxpayer Identification Number (ITIN) is a U.S. taxpayer ID number. It is issued by the IRS or the Internal Revenue Service for those who need to have a taxpayer identification number essential for tax purposes and aren’t qualified to get a SSN (Social Security Number) from the Social Security Administration.
How Can I Get an ITIN From abroad?
Those alien taxpayers who require an ITIN can obtain one from outside the U.S.
Are ITINs can be used for Identification?
No. Individual Taxpayer Identification Numbers cannot be used for identification outside the Federal tax system. Because ITINS are for tax processing only, IRS doesn’t apply similar standards, as agencies give authentic identity certification.
Those who want to apply for ITIN do not actually have to apply in person. Moreover, the IRS doesn’t thoroughly validate the identity documents’ authenticity. Individual Taxpayer Identification Numbers don’t prove identity outside the Federal System, and they should not be accepted or offered as ID for any non-tax purposes.
Can ITINS be utilized for Work Purposes?
NO. It is of note that ITINS are only for federal income purposes and obtaining an ITIN doesn’t change your right to work in the US or your immigration status.
Are ITINS valid as proof of identification to get a driver’s license in the state?
NO. Individual Taxpayer Identification Numbers cannot be used for identification outside the Federal tax system.
What can I do when I’m assigned a SSN or Social Security Number?
When you receive a Social Security Number, it is important for you to use such number for tax purposes and stop using your Individual Taxpayer Identification Number. It is not right to use both the SSN assigned to similar person and the ITIN to file tax returns. You have to notify the IRS so that they can combine all your tax records under a single ID number. However, if you’re not able to notify the IRS when you’re given a SSN, it may be possible that you will not get credit for your entire wages paid and taxes withheld. This could essentially reduce the overall amount of any refund due.
If you’re assigned a SSN, you can write a letter that explains that you’ve been given a Social Security number and you want both your tax records to be combined. You may also visit the IRS office to address your concern. Make sure to include your complete name, your mailing address and your ITIN together with a social security copy, and if available, you may also include a copy of the CP 565, Notice of ITIN Assignment. The IRS will then void the ITIN. They will also associate the entire prior tax information that was filed under the Individual Taxpayer Identification Number with the Social Security Number. If you decided to write a letter, send it to the right address.
ITIN Guide for Foreign Sellers or Buyers of U.S. Property
Aliens who want to sell real property interests in the United Stated to TINs (Taxpayer Identification Numbers when requesting reduced tax withholding when they dispose property interest, and in order to pay any needed withholding. Those who don’t qualify for SSN (Social Security Number may get ITINs (Individual Taxpayer Identification Numbers) in order to meet all the requirements to supply a Taxpayer Identification Number.
The IRS has implemented some new procedures, which are effective on 17 December 2013, in order to strengthen their controls on Individual Taxpayer Identification Number and ensure that the numbers are issued only for tax administration purposes. To assist your qualifying clients get ITINs without any undue hassle, see the information and the instructions for form W-7SP and form W-7. Such information describes how the updated process affects Foreign Investment in Real Property Tax Act (FIRPTA) processing.
TINs needed for Withholding (FORMS 8288 & 8288-A)
The Treasure Decision 9082 that was effective on the 4th of November 2003 requires all buyers or transferees and the foreign transferors or the sellers of the real property interests in the United States to provide their Individual Taxpayer Identification Numbers, addresses and complete names on notice of non-recognition, applications for withholding certificates, withholding tax returns or elections under sections 897 when disposing of a real property interest in the United States. The buyers withholds tax under section 1445 and then remits it to the IRS on Form 8288 and Form 8288-A.
TINs Needed for Requests for Reduced Withholding (FORM 8288)
A seller who wants to reduce or remove the FIRPTA withholding amount should file a Form 8288-B or the Application for Withholding Certificate for Disposition by Foreign Persons of United States Real Property Interests. And because Form 8288-A needs a TIN, a seller and/or the buyer who is not eligible to get an SSN may apply for an Individual Taxpayer Identification Number by attaching the FORM 8288-B to Form W-F and mail the documents to the office of the Internal Revenue Service.
How to Obtain ITIN to Meet the TIN Requirements of FIRPTA
to be able to get an Individual Taxpayer Identification Number for FIRPTA purposes, it is necessary for you to complete the FORM W-7SP or Form W-7. You can find different options in the “Reasons you are submitting Form W-7” of the Form W-7’s section. Choose the box “H” or “other”. Then write “Exception 4” in the Box h’s write-in space.
ITIN requests to get Reduced withholding (Form 8288-B)
The Internal Revenue Service will not issue Individual Taxpayer Identification Numbers according to the completed application and demonstrate a tax need for the numbers. When the IRS rejects your application for ITIN, the attached 8288-B won’t be processed. The Individual Taxpayer Identification Number Unit of the IRS will give notice to the applicant through mail that the Form W-7 wasn’t processed and the Unit of FIRPTA will also send Letter 3793 SC/CG to the seller and foreign buyer with instructions in order to complete the Form W-7 and apply again.
The letter will consist of valuable instructions in order to resolve the problem outlines in the rejection letter of the ITIN. If the applicant decides to reapply, he/she must also include a copy of Letter 3793 SC/CG with Form W-7 in order to be considered under Exception 4. However, if the reason behind the rejection can’t be addressed, the transferee should file Form 8288 or Form 8288-A and remit the ten percent tax.

 

ITIN Requests in order to Pay Withholding on Form 8288 and Form 8288-A

If the buyers don’t have a TIN and the amount withheld under the section 1445 is due to the Internal Revenue Service, it is important to complete the FORM 8288-A, 8288 and send the forms along with the payment to the IRS.
In a different package, the Form W-7 must be mailed along with a photocopy of the Form 8288-A and 8288 and supporting documentation.

 

How to Claim the Reduced Withholding on a Tax Return
Foreign individuals who already have an Individual Taxpayer Identification Number and is seeking to claim for FIRPTA withholding seen on Form 8288-A should complete a federal tax return with the use of the assigned ITIN and then attach the data stamped Form 8288-A to the return as a evidence of the FIRPTA withholding.
Foreign individuals who do not have a TIN and wants to obtain a credit for FIRPTA must request for an Individual Taxpayer Identification Number. In order to do this, the foreign individuals must complete the following items and send it to the Internal Revenue Service:
an original form of W-7
-a federal tax return for the transfer’s year
-the needed documents listed in the instructions of Form W-7
-a settlement statement copy from the sale, reflecting the ten percent withholding
The Notice of Non-recognition
When the seller exchanges a U.S. real property interest and such exchange qualifies for the treatment of non-recognition under the IRC (Internal Revenue Code), the seller needs to draft a notice of non-recognition according to the IRC and then indicate on the notice the name, address and the TIN of the seller. The seller must also present such notice to the Internal Revenue Service no later than twenty days from the exchange’s date. If the needed information is not included in the notice, the transferee can’t rely on it and is needed to withhold tax.
If the seller has to request an Individual Taxpayer Identification Number, he should attach a Form W-7 to request processing under Exception 4 to the notice marked “DRAFT”. The seller must also send such documents to the IRS and it they approve, a notice of the assigned ITIM will be mailed. However, if there is no ITIN assigned to the seller due to the incompletion of the Form W-7 or doesn’t demonstrate any tax purpose, a letter will be sent to the transferor, providing some additional instructions.
The IRC §897(i) Election
If an alien corporation that holds a U.S. real property interest wants to be treated as a domestic corporation for the FIRPTA reporting, an election under §897(i) must be submitted. Such election must consist of the U.S. EIN or Employer identification Number as well as the address and name of the foreign corporation. In order to get an Employer Identification Number, the company must complete the Form SS-4 for EIN and apply by choosing one of the options that are listed in the instructions of the form.

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