The IRS has updated procedures to strengthen the Individual Taxpayer Identification Number program requirements.
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The changes, building on previously announced interim procedures, stem in part from feedback from stakeholders and interested groups on how to safeguard the integrity of ITINs.
ITINs are only issued to those ineligible to obtain a Social Security number.
ITIN applications will continue to require original documentation or copies certified by the issuing agency, and the IRS will no longer accept notarized copies of documents for ITINs. And for the first time, new ITINs will expire after five years (taxpayers who still need an ITIN will be able to re-apply at the end of the expiration period). The IRS said it also intends to explore options for deactivating or refreshing the information relating to ITINs previously issued.
New alternatives to mailing
The IRS said it heard from stakeholders that it’s difficult in some instances for individuals to be without documents such as passports for extended periods, and determined that “trusted outlets” other than the centralized ITIN processing site need to be available to review original documentation. While original documents or copies certified by the issuing agency are still required for most applicants, there will be “more options and flexibility” for people applying for an ITIN other than mailing in passports and other original documents.
Certifying Acceptance Agents, for example, will be able to engage in the ITIN process by reviewing original documents or copies certified by the issuing agency, but will also be required to certify that they have verified the authenticity of the documents supporting the ITIN application.
With respect to dependent children, to substantiate identity and foreign status and protect important child tax credits, ITIN applications submitted to the IRS by a CAA will continue to be required to include original documentation. For children under six, one of the documents can include original medical records. For school-age children, the documentation can include original, current year school records such as a report card.
Also for the first time, only those covered under Circular 230 are eligible to serve as a CAA (exceptions are made for CAA applicants from financial institutions, gaming facilities, Low-Income Taxpayer Clinics and Volunteer Income Tax Assistance Centers). CAAs will be required to take formal forensic training to help them identify legitimate identification documents. The IRS said that it also plans “greater oversight and compliance activities” with CAAs.
Other verification avenues
ITIN applicants will have several other avenues for verification of their documents, including some IRS Taxpayer Assistance Centers; U.S. tax attachés in London, Paris, Beijing and Frankfurt; and at the Low-Income Taxpayer Clinics and Volunteer Income Tax Assistance Centers that have CAAs, among others.
The finalized procedures are effective Jan. 1, 2013. Later in January, participating IRS Taxpayer Assistance Centers will be available to review and certify passports and national identification cards in person for primary, secondary and dependent applicants. The first set of TACs that will review and certify documents for ITINs are located in areas where past ITIN activity has been prevalent, the IRS said. Additional details on participating IRS locations and other rules will be available soon.
Some categories of applicants are not impacted by these documentation changes, including spouses and dependents of U.S. military personnel who need ITINs, and non-resident aliens applying for ITINs for claiming tax treaty benefits.
Comments may be submitted to ITINProgramOffice@irs.gov.