Updated ITIN Guidance (Effective 2013) 

    The IRS issued updated ITIN guidance on November 29, 2012 that makes most of the interim guidelines announced earlier in the year permanent.  Most significantly, the individual taxpayer identification number (ITIN) applications submitted directly by individuals will continue to require original documentation (e.g., passports, driver’s licenses, national I.D. cards) or certified copies.  This option was deemed “simply impractical” by the AICPA in our comments to the IRS on August 28, 2012.  We explained that ITIN applications may need their identification for travel purposes, to prove their legal presence in the United States, or to provide identification for any other purpose, including conducting day-to-day business and unanticipated travel such as for family emergencies.  To address concerns regarding the burden placed on applicants, the IRS will offer other avenues for verification of identification documents including some IRS Taxpayer Assistance Centers, U.S. Tax Attachés, Low-Income Taxpayer Clinics and Volunteer Income Tax Assistance Centers.

    Certified acceptance agents (CAAs) will also be able to certify the authenticity of the documents for adults – a positive change that was strongly advocated by the AICPA.  It means they will not need to mail original documents to the IRS as required under the interim procedures.  However, ITIN applications for dependents will continue to require original documents or copies.  The IRS has also revised the qualification and training requirements on CAAs and plans to expand its oversight on them.

    For the first time, new ITINs will be issued for a five-year period rather than an indefinite period.  Taxpayers will need to reapply at the end of the expiration period.  It is not entirely clear from the guidance whether current ITIN holders are grandfathered from this provision.  According to the guidance, “… the IRS will engage with interested groups on options to deactivate or refresh information underlying previously issued ITINs.”  We will inquire on this issue and post any update on our IRS Practice & Procedure webpage.

    The updated procedures take effect January 1, 2013.

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