Beginning with the 2016 tax year, the IRS has started expiring ITINs for foreign taxpayers. According to the letter taxpayers have received, ITINs are set to expire at the end of 2017.
Foreign taxpayers will need to get their ITIN renewed before we can file a 2017 tax return. I would suggest starting this process as soon as you are able.
In order to renew your ITIN, you will have to get a copy of your passport certified. There are 4 options available.
1.) Have a copy of your passport certified by the issuing agency (passport agency). It must contain their seal and state that the copy is a true copy of the original.
2.) Visit your nearest US Embassy or Consulate and have a staff member certify the passport. Again, it must contain their seal and state that the copy is a true copy of the original.
3.) If you will be here in Florida at any time before your next tax return is due to be filed (June 2018), we can certify your passport. However, we must have a face to face meeting.
4.) You can send us your original passport, we will certify it, and mail it back to you.
Please note that the IRS will not accept a notary seal on the passport copy. You must choose one of the options above.
You will also need to sign a new W7 form, which we will provide.
Please let us know which option above you will chose. Once we have your signed W7 form and the certified passport copy, we will apply for the renewal of your ITIN.
Your ITIN may expire before you file a tax return in 2018. All ITINs not used on a federal tax return at least once in the last three years will expire on December 31, 2017. Additionally, all ITINs issued before 2013 with middle digits of 70, 71, 72 or 80 (Example: (9XX-70-XXXX) will expire at the end of the year.
Note: A tax return is not required with an early renewal application.
What is an ITIN?
An Individual Taxpayer Identification Number (ITIN) is a tax processing number issued by the Internal Revenue Service. The IRS issues ITINs to individuals who are required to have a U.S. taxpayer identification number but who do not have, and are not eligible to obtain, a Social Security number (SSN) from the Social Security Administration (SSA).
What is an ITIN used for?
IRS issues ITINs to help individuals comply with the U.S. tax laws, and to provide a means to efficiently process and account for tax returns and payments for those not eligible for Social Security numbers. They are issued regardless of immigration status, because both resident and nonresident aliens may have a U.S. filing or reporting requirement under the Internal Revenue Code. ITINs do not serve any purpose other than federal tax reporting.
An ITIN does not:
Authorize work in the U.S.
Provide eligibility for Social Security benefits
Qualify a dependent for Earned Income Tax Credit Purposes
Do I need an ITIN?
Does the following apply to you?
You do not have an SSN and are not eligible to obtain one, and
You have a requirement to furnish a federal tax identification number or file a federal tax return, and
You are in one of the following categories.
Nonresident alien who is required to file a U.S. tax return
U.S. resident alien who is (based on days present in the United States) filing a U.S. tax return
Dependent or spouse of a U.S. citizen/resident alien
Dependent or spouse of a nonresident alien visa holder
Nonresident alien claiming a tax treaty benefit
Nonresident alien student, professor or researcher filing a U.S. tax return or claiming an exception
If so, then you must apply for an ITIN.
Do I need to renew my ITIN?
If you need to file a tax return in 2018 and your ITIN has expired or will expire before you file in 2018, IRS recommends you submit your renewal application now to prevent potential delays in the processing of your return. If you use an expired ITIN on a U.S. tax return, it will be processed and treated as timely filed, but without any exemptions and/or credits claimed and no refund will be paid at that time. You will receive a notice explaining the delay in any refund and that the ITIN has expired.
Listed below are frequently asked questions directly from that IRS.gov website that may be helpful.
Q1: Which ITINs expired January 1, 2017?
A1: The following ITINs expired January 1, 2017: ITINs with middle digits of 78 and 79 (e.g. 9NN-78-NNNN). The IRS sent Letter 5821 to taxpayers with those expiring ITINs. ITINs that were not used on a tax return for Tax Year 2013, Tax Year 2014, or Tax Year 2015
Q2: Which ITINs did NOT expire January 1, 2017?
A2: Any ITIN that does not have a middle digit of 78 or 79 and was used on a tax return for Tax Year 2013, Tax Year 2014, or Tax Year 2015 did not expire January 1, 2017.
Q3: What should I do if my ITIN expired January 1, 2017?
A3: You will need to renew your ITIN if you will be filing a tax return or claim for refund using the expired ITIN. You should not renew an ITIN if the ITIN holder now has or is qualified to get a social security number (SSN). See Q&A12.
Q4: When can I renew my expired ITIN?
A4: Taxpayers with a filing requirement whose ITINs have expired , should submit their renewing application and federal return immediately. Taxpayers should allow 7 weeks from the mailing date of the Form W-7, for the IRS to notify you of your ITIN application status (9 to 11 weeks if you submit the application during peak processing periods (January 15 through April 30) or if you’re filing from overseas).
Q5: How do I renew an expired ITIN?
A5: To renew an expired ITIN, you must submit a completed Form W-7, Application for IRS Individual Taxpayer Identification Number, and all required identification documents to the IRS. No tax return is required for a renewal application, however if you have filing requirement you should file the return with the renewing application to prevent a delay in your refund. See Q&A 15. Mail the application to Internal Revenue Service, ITIN Operation, P.O. Box 149342, Austin, TX 78714-9342. See Q&A 13 for information if you do not want to mail documents to the IRS.
Q6: Can I submit copies of my identification documents with my Form W-7?
A6: No, only original of identification documents or certified copies of the documents from the issuing agency will be accepted. See www.irs.gov/ITIN.
Q7: Do I need to renew my ITIN if I won’t be filing a tax return or claim for refund?
A7: No, however, in the future if you file a U.S. tax return or claim for refund, the ITIN (including for a dependent) will need to be renewed at that time.
Q8: I only use my ITIN on information returns, like Forms 1099. If my ITIN expired, do I need to renew it?
A8: No, if your ITIN is only used on information returns and you will not be filing a tax return or claim for refund you do not need to renew your ITIN.
Q9: If I have an ITIN with middle digits of 78 and 79, can I renew my family member’s ITIN, even if it did not expire?
A9: Yes, the IRS will accept a Form W-7 renewal application from each member of a family if at least one of the family members listed on a tax return has middle digits of 78 or 79. If one family member has middle digits 78 or 79, all family members who were issued an ITIN may submit a Form W-7 at the same time.
Q10: Can I renew my ITIN even though my ITIN did not expire, and no one in my family has an ITIN that expired?
A10: Because your ITIN did not expire and there are no tax implications at this time, we ask that you wait and renew your ITIN when it is scheduled to be expired. Only ITINs that expired at the end of 2016 and need to be included on a U.S. tax return in 2017 should be renewed now. To assist taxpayers and minimize burden as much as possible, we are putting in place a rolling renewal schedule. Please visit www.irs.gov/ITIN for the schedule and anticipated timeframe to renew.
Q11: When will the updated Form W-7 and instructions, which includes the renewal information, be available?
A11: The Form W-7 and instructions were revised on September 7, 2016, and can be found at www.irs.gov/W7.
Q12: I have a Social Security Number (SSN) and no longer need my expiring ITIN. Do I need to renew my ITIN?
A12: No, you should not renew your ITIN if you have or are eligible for an SSN. Please notify us that you have obtained a SSN and no longer need the ITIN by visiting a local IRS office or writing a letter explaining that you have now been assigned a SSN and want your tax records combined. If you write a letter, include your complete name, mailing address, and ITIN along with a copy of your social security card and a copy of the CP 565, Notice of ITIN Assignment, if available. The IRS will void the ITIN so it cannot be used by anyone in the future and associate all prior tax information filed under the ITIN with the SSN. Send your letter to: Internal Revenue Service, Austin, TX 73301-0057.
Q13: If I do not want to mail my original documents to the IRS when renewing my ITIN, do I have other options?
A13: Yes, In lieu of sending original documentation, you may be eligible to use an IRS authorized Certified Acceptance Agent (CAA) or make an appointment at a designated IRS Taxpayer Assistance Center (TAC) location. To find a local CAA in your area, you can visit www.irs.gov/individuals/acceptance-agent-program or check your local telephone directory for the nearest location. CAAs can authenticate all the identification documents for the primary and secondary applicant. For dependents, they can authenticate the passport and civil birth certificate; however if other identification documents are used, they must send the original or certified copies of those documents directly to the IRS.
Q14: What kind of passport is acceptable for dependents as a stand-alone identification document?
A14: Effective October 1, 2016, only a passport with an entry date into the U.S. will be acceptable as a stand-alone identification document for dependents from countries other than Canada or Mexico or dependents of U.S. military members overseas. Affected applicants will now be required to submit either U.S. medical records for dependents under age 6 or U.S. school records for dependents under age 18, along with the passport. Dependents aged 18 and over can submit a U.S. school records or a rental or bank statement or a utility bill listing the applicant’s name and U.S. address, along with their passport.
Q15: What happens if I file a tax return prior to receiving notification that my expired ITIN has been renewed?
A15: Until the ITIN is renewed, a return with an expired ITIN will be processed and treated as timely filed, but it will be processed without any exemptions and/or credits claimed and no refund will be paid at this time. The taxpayer will receive a notice from the IRS explaining the delay in any refund. Once the ITIN is renewed, any exemptions and credits will be processed and any allowed refund will be paid. If the ITIN is not renewed, the taxpayer may be subject to interest and penalties for any tax owed as a result of disallowed exemptions and credits.
Q16: How long will it take for an expired ITIN to be renewed?
A16: Taxpayers should allow 7 weeks from the mailing date of the Form W-7 for the IRS to notify you of your ITIN application status (9 to 11 weeks if you submit the application during peak processing periods (January 15 through April 30) or if you’re filing from overseas).
Q17: What if an ITIN holder submits a renewal and then files a tax return before receiving confirmation that their ITIN has been renewed?
A17: If a taxpayer files a return with an expired ITIN, the return will be processed but the applicable exemptions and credits will be removed and no refund will be paid at that time. IRS will issue a CP notice with the appropriate adjustments that may result in a balance due and penalties. . The notice will also inform the taxpayer that the ITIN has expired. This process will delay the return and any refund associated with the expired ITIN(s).
Q18: How will the taxpayer know that their ITIN is renewed? Will they receive a letter? If so, what is the notice number?
A18: CP565 will be issued to the applicant, Confirmation of your Individual Taxpayer Identification Number, when an ITIN is renewed.
Q19: If someone files a return in tax season without renewing, what kind of correspondence will they receive?
A19: A return filed with an expired ITIN will be processed, but any exemptions and/or credits claimed applicable to the expired ITIN will not be allowed. The taxpayer will receive a notice from the IRS explaining the change(s) made to their tax return and that you and/or spouse ITIN expired. Once the ITIN is renewed, any exemptions and/or credits previously disallowed will be reconsidered at that time. Until the ITIN is renewed, the taxpayer will be subject to interest and penalties for any tax owed as a result of disallowed exemptions and credits.
Q20: Is an ITIN considered to be issued when the ITIN application and accompanying return are received?
A20: For new ITINs the “issuance date” will be the received date of the Form W-7 application. For renewed ITINs the “issuance date” will be the original date the ITIN was assigned before it expired./p>
Q21: What if an ITIN application is received (without a return) prior to the tax return due date, but the return itself is received after the tax return due date? What would the issuance date be?
A21: The date the tax return is filed does not impact the “issuance date” of the ITIN. The “issuance date” of the ITIN will depend on whether it is a new ITIN or whether the taxpayer already had an ITIN that has expired and they were renewing their ITIN. See Q&A 20.
Q22: Does a taxpayer have to formally file an extension request in order to extend the tax return due date beyond June 15?
Q23: What will be the status of the return on “Where’s my refund?” be, if the return is filed with an expired ITIN?
A23: When a return is filed with an expired ITIN, credits are denied, and the math error is generated. “Where’s my refund?” will display a general message that addresses the impact of the math error on the return filed (i.e., whether there has been a refund decrease or there is now a balance due).
Q24: How long will the return be delayed in processing?
A24: It is not possible to provide an exact timeframe for how long the return will be delayed since that would be dependent upon whether it was the ITIN of the primary, secondary, or dependent(s) on the return and which credits are being claimed. A return filed with an expired ITIN will be processed, but any exemptions and/or credits claimed applicable to the expired ITIN will not be allowed. The taxpayer will receive a notice from the IRS explaining the change(s) made to their tax return and that the ITIN must be renewed. Once the ITIN is renewed, any exemptions and/or credits previously disallowed will be reconsidered at that time.
Q25: When an individual renews their ITIN, will they retain the same ITIN or receive a new one?
A25: Once an ITIN is assigned, it belongs to that taxpayer, unless the ITIN has been revoked. When an individual renews their ITIN, the previously assigned number is renewed.
Q26: When will letters be sent out to individuals who need to renew their ITINs for the upcoming filing season?
A26: CP 48 will be mailed between 8/15 and 9/20/2016 to all ITIN holders with middle digits 78 or 79 that were currently being used on a tax return letting them know their ITIN would expire on January 1, 2017.
Q27: Will only one letter be sent per tax return or will a separate letter be sent to each ITIN holder on a return that needs to renew?
A27: When multiple ITIN holders are identified as currently being used on the same tax return, one CP48 notice will be mailed to the primary and secondary taxpayer at the address on the last return the ITINs were present.
Q28: Will it be a general letter (i.e. you or someone in your household) or a personalized letter?
A28: It is a general notice advising them that according to our records, the ITIN for them or someone listed on their tax return is set to expire. The notice also explains what they need to do to renew the ITIN.
Q29: Will the IRS accept an older version of the W-7 that has Renew an Existing ITIN written on it?
A29: The IRS encourages taxpayers to use the 9-2016 version of the Form W-7. The applicant must indicate they are renewing the ITIN, must provide the ITIN number and name under which it was issued, and must indicate the reason for applying (tax filing purpose or claiming one of the Exceptions to a tax return). If the applicant applies for the ITIN for an Exception reason, they must attach the appropriate supporting documentation. Renewing an ITIN is not an Exception reason.
Q30: What type of documents are CAAs and TAC offices authorized to authenticate for dependents?
A30: CAAs are authorized to authenticate the passport and birth certificate for dependents. TAC Offices are authorized to authenticate the passport, birth certificate, and national ID cards for dependents.
Q31: I submitted an ITIN renewal request , but have not been notified of the status. What should I do?
A31: Taxpayers should allow 7 weeks from the mailing date of the Form W-7, for the IRS to notify you of your ITIN application status (9 to 11 weeks if you submit the application during peak processing periods (January 15 through April 30) or if you’re filing from overseas.
If you have any questions, please let us know.
Moats & Associates, CPAs
2017 Individual Tax Identification Number (ITIN) Renewal Update
2100 S. Ridgewood Ave., Ste. 7, South Daytona, FL 32119
Phone: (386) 760-3083 Email: Reception@RRMoatsCPA.com