- The document discusses the Individual Tax Identification Number (ITIN) program, which issues ITINs to individuals who are not eligible to obtain a Social Security Number but who still need to file a US tax return. - It describes the requirements and documentation needed to apply for an ITIN, including proof of identity and foreign status. Applicants must demonstrate if they are resident or nonresident for tax purposes using the Substantial Presence Test. - Common errors in ITIN applications are outlined, such as not including a required tax return, using outdated forms, or failing to properly translate or certify foreign documents. Acceptance Agents can assist individuals in applying for ITINs.

1. I ndividual T ax I dentification N umber (ITIN) – ITIN Program Office Atlanta, GA

2. 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 individual’s immigration status Give the individual the right to work in the U.S.

3. 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

4. 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)

5. 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.

6. 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 applicant’s entrance to the U.S. and for any subsequent travel outside the U.S.

7. 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.

8. 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

9. 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

10. Required ITIN Application Documentation should… 1. Provide documentation to prove the applicant’s identity – contain the applicant’s name and a photograph 2. Provide documentation to prove the applicant’s claim of foreign status

11. 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.

12. Acceptable Documentation for ITIN application Changed in December 2003 to 13 items Passport U.S. driver’s 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

13. Acceptable Documentation (cont.) Foreign driver’s license U.S. state identification card Foreign voter’s registration card U.S. military identification card Foreign military identification card

14. 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)

15. 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

16. 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.

17. School Records Acceptable forms of school identification: Student picture ID Report card Letter from school Administrative record

18. 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

19. 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

20. 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

21. 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

22. 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

23. Exception 2 - Documentation Evidence of a home mortgage loan Examples - loan commitment letter from the financial institution, a broker’s listing agreement, or similar documentation

24. 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

25. 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

26. 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

27. Common Application Errors Not attaching a tax return when required Not attaching documentation for one of the exceptions when no return is attached

28. 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.

29. 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

30. 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.

31. 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.

32. Contact Information Francine Prince Chief, ITIN Program Office 401 W. Peachtree St., NW Mail Stop 97 WI Atlanta, GA 30308 (404) 338-8963 [email_address]