Saturday, October 22, 2016

New requirements for some taxpayers who have Individual Taxpayer Identification Numbers

The IRS is implementing a change to the Individual Taxpayer Identification Number (ITIN) program to require some taxpayers to renew their ITIN. The Protecting Americans from Tax Hikes Act requires that if you were issued an ITIN, but have not used it (as the primary filer, spouse or dependent) on a federal tax return at least once in the last three years, your ITIN will expire at the end of 2016.

Additionally, if you have an ITIN with middle digits 78 or 79, whether you used it on a tax return or not, it will also expire at the end of 2016. The IRS has mailed Letter 5821 to affected taxpayers whose ITIN number has middle digits 78 and 79, and who have filed a return at least once in the last three years. The letter explains the steps to take to renew your ITIN.

If you have to file a tax return, you will need to renew your ITIN. To renew your ITIN, you must complete Form W-7, Application for IRS Individual Taxpayer Identification Number, follow the instructions and include all information and documentation required. No tax return is required when renewing an ITIN. Taxpayers who have a filing requirement and whose ITIN will expire at the end of the calendar year can begin the renewal process starting October 1. Taxpayers are reminded to use the most current revision of the Form W-7 (Rev. 9-2016).

If you have an ITIN with the middle digits of 78 or 79 and receive a renewal letter from the IRS, you can choose to renew the ITINs of all your family members at the same time. Family members include the tax filer, the spouse and any dependents claimed on their tax return.

If taxpayers do not renew their ITIN and file a U.S. tax return with the expired ITIN, there may be a delay in processing. Taking timely action to renew will help avoid delays.

The new policy will ensure that ITINs are being issued for legitimate tax purposes and serve to further protect the ITIN program.

Further details can be found on www.irs.gov by searching “ITIN.”

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