In a win for taxpayers, the Internal Revenue Service (IRS) has adopted a recommendation of the American Institute of CPAs (AICPA) and modified its proposed application and renewal process for Individual Taxpayer Identification Numbers (ITINs). The IRS issues ITINs to individuals who are required to have a U.S. taxpayer identification number for U.S. tax purposes but who do not have, and are not eligible to obtain, a Social Security number from the Social Security Administration. As a result, these individuals will no longer have to send original documents, such as passports, to the U.S. in order to obtain an ITIN.
The IRS had outlined the change in IRS Notice 2016-48, which was issued to implement the ITIN provisions in the Protecting Americans from Tax Hikes Act of 2015 (PATH Act). The PATH Act includes provisions regarding the mandatory expiration and renewal of all ITINs issued before January 1, 2013, as well as updated requirements for new ITIN applications. Under the PATH Act, all ITINs issued prior to January 1, 2013 will automatically expire and require renewal by the taxpayer on a staggered schedule. In addition, all ITINs will now expire after three consecutive years of nonuse on an income tax return.
The IRS announced in April that it had “expanded the options available to taxpayers residing abroad who need an ITIN to fulfill their U.S. filing requirement. In addition to the current options of mailing the completed Form W-7, Application for Individual Taxpayer Identification, and required identification documents to the IRS or visiting an IRS Taxpayer Assistance Center in the United States, taxpayers can now visit a U.S.-based Certified Acceptance Agent (CAA) or a CAA located abroad.”
In response to the AICPA’s request for clarification, the IRS wrote, “IRS rescinded the termination of foreign Certified Acceptance Agents (CAA) effective April 17, 2017.” The IRS stated, “Reinstated foreign CAAs are again authorized to assist foreign applicants as they did prior to their termination by authenticating original documents and submitting to the IRS copies of the documents with Form W-7(COA) and all other required information.”