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Individual Tax Identification Number (ITIN) –

ITIN Program OfficeAtlanta, GA

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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.

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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

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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)

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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.

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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.

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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.

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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

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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

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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

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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.

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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

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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

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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)

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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

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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.

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School Records

Acceptable forms of school identification: Student picture ID Report card Letter from school Administrative record

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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

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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

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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

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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

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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

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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

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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

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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

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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

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Common Application Errors

Not attaching a tax return when required

Not attaching documentation for one of the exceptions when no return is attached

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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.

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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

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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.

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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.

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Contact Information

Francine PrinceChief, ITIN Program Office401 W. Peachtree St., NWMail Stop 97 WIAtlanta, GA 30308

(404) 338-8963ITINProgramOffice@irs.gov