CCH Tax Day Report
Taxpayers affected by recent changes involving the Individual Taxpayer Identification Number (ITIN) program can, as of October 1, submit their ITIN renewal applications to the IRS. Under the Protecting Americans from Tax Hikes (PATH) Act of 2015 (P.L. 114-113), any ITIN not used on a federal tax return at least once in the last three years will no longer be valid for use on a tax return as of January 1, 2017. Taxpayers who have ITINs that are scheduled to expire and need to file a tax return should submit the application package in the next few weeks to avoid unnecessary delays and allow for smoother and faster processing.
Who Should Renew
Only ITIN holders who need to file a tax return in 2017 need to renew their ITINs. Taxpayers will need to have a current ITIN in order to file a federal return in 2017; others do not need to take any action. Taxpayers with ITINs that have not been used on a federal income tax return in the last three years will not be able to file a return unless their ITINs are renewed. Further, ITINs with the middle digits 78 or 79 (xxx-78-xxxx; xxx-79-xxxx) need to be renewed even if the taxpayer has used it in the last three years.
The IRS recently mailed over 300,000 letters alerting taxpayers with ITINs with middle digits of 78 or 79 of the need to renew their ITINs. Taxpayers with an ITIN with middle digits of 78 or 79 have the option to renew ITINs for their entire family at the same time. Those who have received a renewal letter from the IRS can choose to renew the family’s ITINs together even if family members have an ITIN with middle digits other than 78 or 79. Family members include the tax filer, spouse and any dependents claimed on the tax return.
How to Renew an ITIN
A taxpayer must fill out a Form W-7 and submit all required documentation. There are three ways to submit the W-7 application package:
(1) Mail the Form W-7, along with original identification documents or copies certified by the agency that issued them, to the IRS address listed on the Form W-7 instructions. The IRS will review the identification documents and return them within 60 days.
(2) Taxpayers also have the option to work with Certified Acceptance Agents (CAAs) authorized by the IRS to help taxpayers apply for an ITIN. CAAs will review all documentation for a taxpayer and certify that an ITIN application is correct before submitting it to the IRS for processing. A CAA can also certify passports and birth certificates for dependents, thus saving taxpayers from having to mail original documents to the IRS.
(3) In advance, taxpayers can call and make an appointment at a designated IRS Taxpayer Assistance Center in lieu of mailing original identification documents to the IRS.
A federal tax return does not be attached to the Form W-7 application if an ITIN is being renewed. However, taxpayers must still note a reason for needing an ITIN on the Form W-7. More detailed information is available on the Form W-7 instructions.
In order to increase the availability of ITIN services nationwide, particularly in communities with high ITIN usage, the IRS is actively recruiting CAAs, and applications are now accepted year-round. Interested individuals, community outreach partners and volunteers at tax preparation sites are encouraged to review all program changes and requirements. Also, the IRS has developed material in several languages for community outreach partners interested in helping the IRS get this message to all affected taxpayers.
The IRS has embarked on a wider education effort to share information with ITIN holders. A variety of informational materials, including flyers and fact sheets, available in several languages are available on IRS.gov. In addition to English and Spanish, materials are available in Chinese, Korean, Haitian Creole, Russian and Vietnamese. The IRS continues to work with partner groups and others in the ITIN community to share information widely about these changes. ITIN holders who have questions should visit the ITIN information page on the IRS website and take a few minutes to understand the guidelines.