I ndividual  T ax  I dentification  N umber (ITIN) – ITIN Program Office Atlanta, GA
An ITIN  does NOT ... <ul><li>Entitle the recipient to Social Security benefits or Earned Income Tax Credit (EITC);  but, ...
Reasons for Form W7 <ul><li>Should  not  apply for an ITIN if eligible for a SSN </li></ul><ul><li>Form W-7 (Application f...
An ITIN is required if you are... <ul><li>A nonresident alien filing a U.S. tax return and not eligible for a SSN  (Reason...
An ITIN is required if you are …. <ul><li>A dependent of U.S. citizen/resident alien  (Reason  d  on W-7) </li></ul><ul><l...
Substantial Presence Test <ul><li>Determines if the applicant is a resident or nonresident for tax purposes </li></ul><ul>...
Substantial Presence Test <ul><li>If the client meets the substantial presence test, the client is considered to be a resi...
Substantial Presence Test <ul><li>To meet the substantial presence test, the individual must be physically present in the ...
Substantial Presence Test <ul><li>Counting: </li></ul><ul><ul><li>All  the days present in the  current year , and </li></...
Required ITIN Application Documentation should… <ul><li>1.   Provide documentation to prove the applicant’s  identity   – ...
ITIN Documentation <ul><li>Documentation substantiating identity must be: </li></ul><ul><ul><li>Originals , or </li></ul><...
Acceptable Documentation for ITIN application <ul><li>Changed in December 2003 to 13 items </li></ul><ul><ul><li>Passport ...
Acceptable   Documentation (cont.) <ul><ul><li>Foreign driver’s license </li></ul></ul><ul><ul><li>U.S. state identificati...
Acceptable Documentation (cont.) <ul><ul><li>Visa – an official authorization  appended to a passport –  not the credit ca...
Documentation <ul><li>A valid passport is the only stand-alone document </li></ul><ul><li>If other documentation is provid...
Current Documents <ul><li>Birth certificates do not contain expiration dates and are considered current. </li></ul><ul><li...
School Records <ul><li>Acceptable forms of school identification: </li></ul><ul><li>Student picture ID </li></ul><ul><li>R...
Documents in Foreign Language <ul><li>Certified Translation should be provided </li></ul><ul><ul><li>Signed and sealed by ...
Return attached? <ul><li>New rules  effective  12/17/03 </li></ul><ul><li>Require a  federal  tax return to be attached to...
Exception 1 <ul><li>Passive Income – third party withholding  </li></ul><ul><li>The applicant has an asset that generates ...
Exception 1 -   Documentation <ul><li>Evidence that the applicant opened an account with a financial institution that he/s...
Exception 2 <ul><li>Third Party Reporting – mortgage interest </li></ul><ul><li>Individual that has secured a home loan ma...
Exception 2 - Documentation <ul><li>Evidence of a home mortgage loan </li></ul><ul><li>Examples -  loan commitment letter ...
When to complete Form W-7 <ul><li>Exception met – as soon as exception is determined </li></ul><ul><li>No exception met – ...
Common Application Errors <ul><li>Application mailed to regular IRS Service Center instead of the ITIN group in Philadelph...
Common Application Errors <ul><li>Name entries on Form W-7 not matching supporting documentation </li></ul><ul><li>Sending...
Common Application Errors <ul><li>Not attaching a tax return when required </li></ul><ul><li>Not attaching documentation f...
Common Application Errors <ul><li>Not having documentation properly notarized when originals are not sent </li></ul><ul><l...
Other Information <ul><li>If an extension for time to file or an estimated tax payment is sent prior to receiving the ITIN...
Acceptance Agent Program <ul><li>Acceptance Agents are critical to the success of the ITIN program because of their close ...
Changes in the AA Program <ul><li>Acceptance Agent Agreements expire  December 31, 2005. </li></ul><ul><li>New Agreements ...
Contact Information <ul><li>Francine Prince </li></ul><ul><li>Chief, ITIN Program Office </li></ul><ul><li>401 W. Peachtre...
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Itin Power Point

  1. 1. I ndividual T ax I dentification N umber (ITIN) – ITIN Program Office Atlanta, GA
  2. 2. An ITIN does NOT ... <ul><li>Entitle the recipient to Social Security benefits or Earned Income Tax Credit (EITC); but, may be eligible for CTC and ACTC </li></ul><ul><li>Create an inference regarding the individual’s immigration status </li></ul><ul><li>Give the individual the right to work in the U.S. </li></ul>
  3. 3. Reasons for Form W7 <ul><li>Should not apply for an ITIN if eligible for a SSN </li></ul><ul><li>Form W-7 (Application for an ITIN) has 8 “reasons for applying” that are listed as boxes a through h </li></ul><ul><li>Four commonly used by the immigrant population – boxes b, c, d, e </li></ul>
  4. 4. An ITIN is required if you are... <ul><li>A nonresident alien filing a U.S. tax return and not eligible for a SSN (Reason b on W-7) </li></ul><ul><li>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) </li></ul>
  5. 5. An ITIN is required if you are …. <ul><li>A dependent of U.S. citizen/resident alien (Reason d on W-7) </li></ul><ul><li>A * nonresident spouse being shown on a tax return as an exemption (Reason e on W-7) </li></ul><ul><li>* resident spouse, too. </li></ul>
  6. 6. Substantial Presence Test <ul><li>Determines if the applicant is a resident or nonresident for tax purposes </li></ul><ul><li>Determines which box to mark on Form W-7 for “reason for applying” – Reason b or c </li></ul><ul><li>Needs dates for the applicant’s entrance to the U.S. and for any subsequent travel outside the U.S. </li></ul>
  7. 7. Substantial Presence Test <ul><li>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. </li></ul><ul><li>Test based on number of days the client has resided in the U.S. </li></ul><ul><li>Special rules apply for visa holders regarding days that can be counted as residing in the U.S. </li></ul>
  8. 8. Substantial Presence Test <ul><li>To meet the substantial presence test, the individual must be physically present in the U.S. for at least: </li></ul><ul><ul><li>31 days during the current year, and </li></ul></ul><ul><ul><li>183 days during the 3-years that includes the current year and the 2 years immediately before that </li></ul></ul>
  9. 9. Substantial Presence Test <ul><li>Counting: </li></ul><ul><ul><li>All the days present in the current year , and </li></ul></ul><ul><ul><li>1/3 of the days present in the first year before the current year , and </li></ul></ul><ul><ul><li>1/6 of the days present in the second year before the current year </li></ul></ul>
  10. 10. Required ITIN Application Documentation should… <ul><li>1. Provide documentation to prove the applicant’s identity – contain the applicant’s name and a photograph </li></ul><ul><li>2. Provide documentation to prove the applicant’s claim of foreign status </li></ul>
  11. 11. ITIN Documentation <ul><li>Documentation substantiating identity must be: </li></ul><ul><ul><li>Originals , or </li></ul></ul><ul><ul><li>Copies Certified by the Issuing Agency or official custodian of the original record, or, </li></ul></ul><ul><ul><li>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. </li></ul></ul><ul><ul><li>Copies Notarized by a Foreign Notary Public under the Hague Convention require an Apostille to be attached. </li></ul></ul>
  12. 12. Acceptable Documentation for ITIN application <ul><li>Changed in December 2003 to 13 items </li></ul><ul><ul><li>Passport </li></ul></ul><ul><ul><li>U.S. driver’s license </li></ul></ul><ul><ul><li>Civil birth certificate </li></ul></ul><ul><ul><li>* National identification card (must show photo, name, current address, date of birth, and expiration date) </li></ul></ul><ul><ul><li>* Canadian applicants can use: Permanent Residence Card or Certificate of Citizenship, both acceptable National ID </li></ul></ul>
  13. 13. Acceptable Documentation (cont.) <ul><ul><li>Foreign driver’s license </li></ul></ul><ul><ul><li>U.S. state identification card </li></ul></ul><ul><ul><li>Foreign voter’s registration card </li></ul></ul><ul><ul><li>U.S. military identification card </li></ul></ul><ul><ul><li>Foreign military identification card </li></ul></ul>
  14. 14. Acceptable Documentation (cont.) <ul><ul><li>Visa – an official authorization appended to a passport – not the credit card. </li></ul></ul><ul><ul><li>U.S. Citizenship and Immigration Services (USCIS) photo identification </li></ul></ul><ul><ul><li>Medical records (dependents only) </li></ul></ul><ul><ul><li>School records (dependents and/or students under 14 y/o only) </li></ul></ul>
  15. 15. Documentation <ul><li>A valid passport is the only stand-alone document </li></ul><ul><li>If other documentation is provided, at least two forms of documentation need to be provided and one must be a photo identification </li></ul><ul><ul><li>Exception for dependents under age 14 – no picture required </li></ul></ul>
  16. 16. Current Documents <ul><li>Birth certificates do not contain expiration dates and are considered current. </li></ul><ul><li>If document has an expiration date, expiration date cannot have passed. </li></ul><ul><li>Medical records must be within 12 months of the current date (application date). </li></ul><ul><li>School records are current if date displayed on records is not more than one year prior to date application is submitted. </li></ul>
  17. 17. School Records <ul><li>Acceptable forms of school identification: </li></ul><ul><li>Student picture ID </li></ul><ul><li>Report card </li></ul><ul><li>Letter from school </li></ul><ul><li>Administrative record </li></ul>
  18. 18. Documents in Foreign Language <ul><li>Certified Translation should be provided </li></ul><ul><ul><li>Signed and sealed by official performing the translation </li></ul></ul><ul><ul><li>Certifying the information on the foreign document </li></ul></ul><ul><li>Attach certified translation and document in foreign language to the ITIN application </li></ul>
  19. 19. Return attached? <ul><li>New rules effective 12/17/03 </li></ul><ul><li>Require a federal tax return to be attached to the W-7 application unless an exception is met </li></ul><ul><li>Exception needs to be documented </li></ul><ul><li>Four exceptions - two most commonly seen with immigrant community </li></ul>
  20. 20. Exception 1 <ul><li>Passive Income – third party withholding </li></ul><ul><li>The applicant has an asset that generates income subject to information reporting OR withholding requirements </li></ul><ul><li>Example – interest bearing bank account </li></ul>
  21. 21. Exception 1 - Documentation <ul><li>Evidence that the applicant opened an account with a financial institution that he/she has an ownership interest in the account </li></ul><ul><li>Examples – bank statement </li></ul><ul><li>signature card </li></ul><ul><li>letter from bank – on letterhead </li></ul>
  22. 22. Exception 2 <ul><li>Third Party Reporting – mortgage interest </li></ul><ul><li>Individual that has secured a home loan may seek an ITIN to provide to their lender – the lender reports mortgage interest on Form 1098 </li></ul>
  23. 23. Exception 2 - Documentation <ul><li>Evidence of a home mortgage loan </li></ul><ul><li>Examples - loan commitment letter from the financial institution, a broker’s listing agreement, or similar documentation </li></ul>
  24. 24. When to complete Form W-7 <ul><li>Exception met – as soon as exception is determined </li></ul><ul><li>No exception met – when next tax return is due to be filed </li></ul><ul><li>Delinquent returns – when delinquent returns are ready to be filed </li></ul>
  25. 25. Common Application Errors <ul><li>Application mailed to regular IRS Service Center instead of the ITIN group in Philadelphia (use address shown on W-7 instructions) </li></ul><ul><li>Using outdated Form W-7 </li></ul><ul><li>Not showing an entry date into the U.S. when applicant is residing in the U.S. </li></ul><ul><li>Not signing Form W-7 </li></ul>
  26. 26. Common Application Errors <ul><li>Name entries on Form W-7 not matching supporting documentation </li></ul><ul><li>Sending documents that have expired </li></ul><ul><li>Not marking one of the boxes for reason application is being submitted </li></ul><ul><li>Not entering birth date in MM/DD/YYYY format </li></ul><ul><li>Not showing foreign address on line 2 </li></ul>
  27. 27. Common Application Errors <ul><li>Not attaching a tax return when required </li></ul><ul><li>Not attaching documentation for one of the exceptions when no return is attached </li></ul>
  28. 28. Common Application Errors <ul><li>Not having documentation properly notarized when originals are not sent </li></ul><ul><li>Not having foreign documents *translated or not attaching the foreign document </li></ul><ul><li>* Spanish may not need to be translated since PSC ITIN Unit may have bilingual employees. </li></ul>
  29. 29. Other Information <ul><li>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. </li></ul><ul><li>ITIN taxpayer address change – have taxpayer complete Form 8822 and mail to Philadelphia </li></ul><ul><li>ITIN taxpayer name change – have taxpayer notify ITIN unit and send appropriate documentation </li></ul>
  30. 30. Acceptance Agent Program <ul><li>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. </li></ul><ul><li>AAs can include educational institutions, financial institutions, government entities/military installations, volunteer organizations and tax practitioners. </li></ul><ul><li>If you are interested in becoming an AA please sign the mailing list and we will send you our application and information packet. </li></ul>
  31. 31. Changes in the AA Program <ul><li>Acceptance Agent Agreements expire December 31, 2005. </li></ul><ul><li>New Agreements will expire 4 years from the date signed. </li></ul><ul><li>Application Form 13551 is required to apply for the AA Program. </li></ul><ul><li>FBI Investigations (fingerprinting) </li></ul><ul><li>Compliance checks. </li></ul>
  32. 32. Contact Information <ul><li>Francine Prince </li></ul><ul><li>Chief, ITIN Program Office </li></ul><ul><li>401 W. Peachtree St., NW </li></ul><ul><li>Mail Stop 97 WI </li></ul><ul><li>Atlanta, GA 30308 </li></ul><ul><li>(404) 338-8963 </li></ul><ul><li>[email_address] </li></ul>

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