ITIN, also known as the individual taxpayer identification number, is a number issued for tax processing by Internal Revenue Service. The number consists of nine digits, starts with 9, and will always have a 7 or 8 as its fourth digit. An example is 9XX-8X-XXXX. This ITIN number is issued by the IRS to those people who need to have a US taxpayer identification number because they do not, and cannot, have a Social Security Number or SSN. An individual can possess either an ITIN or a SSN and never both.
The Purpose of ITIN
The ITIN number is used for the purpose of reporting federal tax. It does not provide eligibility for gaining benefits of Social Security or Earned Income Tax Credit, nor does it authorize work within the United States. Therefore, this number does not provide any validation outside of the tax system. The ITINs are issued by the IRS so as to five individuals the ability to comply with the tax laws within the US. They also help to account and process all of the tax payments and returns effectively for the people who cannot get a Social Security Number.
Who Requires ITIN?
ITINs are usually required by foreign nationals or other people who might have federal tax filing and reporting requirements but do not have a Social Security Number. Therefore, a non resident, who cannot get a SSN but is required to file a tax return in the United States so that they can claim a refund for tax under the United States Tax Treaty provisions, will require an ITIN number. Here are a few examples of people who require an ITIN:
- A spouse or dependent of a person who is a US resident or citizen
- A spouse or dependent of a person who is a non resident visa holder
- A non resident who is not eligible to get a SSN but needs to file a US tax return
- Certain US residents who do not qualify for SSN but are filing tax returns within the US.
ITINs cannot be used for identification that is outside of the tax system. This number can only be used for tax processing, and therefore, any use outside of this system will not be accepted. This is because ITINs cannot be used to prove the identity of a person outside of the tax system. Also, an individual cannot possess both a SSN and an ITIN at a single time.
An ITIN number is solely for the purpose of federal income taxes. If you happen to have any further confusion regarding the number, or need further clarifications on any aspect of it, then feel free to contact us. We will be more than happy to help you out and answer any of the questions that you might have. It is important that you have enough information about the ITIN, especially if you are a non resident and are required to file your taxes within the United States.
New Guidelines for ITIN Tax Number
The Internal Revenue Service issued a new set of policies in June 2012 that were intended to streamline the processes that govern issuance of ITIN TAX Number. These policies came as part of an effort by the government to ensure that ITIN Tax Numbers are not being used illegally, or for fraudulent purposes. These policies were put into effect in 2013, with the hopes of ensuring that the new regime would help rectify the loopholes inherent in the previous system.
There was mixed feedback on the effectiveness of the new set of policies. While some advocate that the stringent policies will indeed be able to withhold a more substantial tax regime, others argue that the change could not have come at a more inappropriate time. Regardless of the impact that the new policies will be able to achieve, here we shed some light on the guidelines that were introduced:
ITIN Tax Number Will Expire In 5 Years
For the first time, ITIN Tax Numbers would expire within 5 years of their issuance. Previously, once issued, the ITIN was valid throughout the life of the holder, or unless s/he acquired a Social Security Number. As part of the new set of policies, however, the Internal Revenue Service has established a ceiling of 5 years on the validity of the ITIN.
Holders of ITIN Tax Number are now required to reapply for one at the end of the expiration period of their ITINs. This change was announced to ensure that ITINs are just being used for legitimate tax purposes, and not to meet illegal and fraudulent motives.
Trusted Outlets Will Review Documentation
Previously, applicants for ITIN Tax Number were required to submit original copies of various documents, like birth certificates and passports, to the Internal Revenue Service for applying for an ITIN Tax Number. This was quite time consuming, and also posed several hardships for those tax payers who had to travel long distances for the submission of documents.
Effective from January 1, 2013, certain trusted outlets, like Certifying Accepting Agents (CAAs), are allowed to review the original documents for certain applicants. Once reviewed, they can verify to the Internal Revenue Service that they have verified the documents. This means the original documents would not need to be sent to the IRS anymore.
CAA Certification under Circular 230
The new regime has also strengthened the requirements for those who can qualify as Certifying Accepting Agents. Now only those covered under the professional standards of Circular 230 can qualify for CAAs. These requirements include, among others, taking up formal forensic training for purposes of document identification.
As part of this change, only those tax return preparers, enrolled agents and attorneys would be allowed to review documents for applicants who fulfill the requirements under this circular. This change has been made to ensure that stricter due diligence is observed in order to preserve the integrity of the system governing the ITIN Tax Number.
Requiring Assistance with ITIN Numbers
ITIN numbers can be really confusing at times. Sometimes, an individual mixes them and mistakes them for more then what they are. At times, when you talk to any other individuals regarding this matter, they may not know what the other is talking about. Another factor can be that the individual may mistake ITIN numbers for something else, which can turn into a misunderstanding.
What are ITIN Numbers?
ITIN numbers are a set of unique 9 digits which are used for tax returns. This unique number helps the IRS, Internal Revenue Services, know which individuals have been paying their taxes. The IRS is only involved with taxes. They have no other business regarding anything else. When an individual works, a part of their pay is received by the government in the form of tax. This is gathered every time an individual receives his or her pay. If by chance, the individual pays more than they are suppose to, the extra amount is called tax return. This is where ITIN steps in. The tax return is only given to those who have an ITIN number. Until, and unless, an individual does not have an ITIN number, they are not given their tax returns even if they are supposed to.
Application Process for ITIN Numbers
There is only one method of receiving an ITIN number. An individual must apply through a W-7 form. This form can be found on the official IRS website and can be downloaded from there respectively. After the form has been found and downloaded, the individual applying can get the form printed out in order to fill it. Once that also has been taken care of, the individual can attach the required documents to the W-7 form and mail it to the IRS headquarters, if the individual wishes, he or she may personally drop it off as well, or can send the documents through an assistance center. The nearest tax assistance center can also be found on the website of the IRS. The assistance center has agents who can provide you with any kind of assistance which is required. It can be assistance regarding the W-7 form, IRS information, or related to it. Only you have submitted the form along with the proper documents, the agent will forward it to the IRS. The IRS will do the rest, it can take up to 6 weeks for an individual to receive their ITIN number. It may take longer, considering if there are any issues in the form, the documents, or even if its tax season, as those are the busiest times for the IRS.
For further assistance with your quarries you can feel free to ask us, we will not take long to get back to you.
If you want to apply for an, Individual Taxpayer Identification Number, or ITIN tax number and have any other questions, please feel free to contact us at 888-509-3616. If you have any suggestions please share those with us as well. Freedomtax ITIN Number has a professional team of IRS Certifying Acceptance Agents, and tax accounting professionals with more than 16 years of experience, helping immigrants with their ITIN application. Freedomtax can also help immigrant entrepreneurs incorporate a business in the USA. Freedomtax ITIN Tax Number Online services provides Quality, Professional Service with a Family Feel.