Washington (December 22, 2003) -- The Internal Revenue Service has made major changes to the way it issues Individual Taxpayer Identification Numbers to make sure they’re used for their intended purpose.

The ITIN, a nine-digit number that begins with the number nine, was created for use on tax returns for taxpayers who don’t qualify for a Social Security Number. However, the IRS said some ITINs are being used as a form of identification.

“About one-quarter of the ITINs issued for tax return purposes never actually find their way onto a tax return,” said IRS commissioner Mark W. Everson. “The steps taken ensure ITINs will be issued only to those seeking to comply with their tax obligations.”

Effective immediately, all new ITIN applicants will have to provide proof that the ITIN will be used for tax administration purposes. For example, applicants seeking an ITIN in order to file a federal tax return will have to file the return along with the W-7. ITIN applications without proof of need will be rejected.

The IRS also cut the number of documents it will accept as proof of identity to obtain an ITIN to 13 from 40. The 13 acceptable documents are listed in the new Form W-7 instructions. In addition, the appearance of the ITIN will change from a card to an authorization letter to eliminate similarities with a Social Security Number card.

Earlier this year, the IRS issued letters to all governors and state motor vehicle departments advising that ITINs aren’t suitable for determining identification of applicants for driver’s licenses.

-- WebCPA staff

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