ITIN GUIDE: INFORMATION AND UPDATES …

1 itin guide : INFORMATION . AND UPDATES ABOUT THE. IRS'S INDIVIDUAL TAX. identification NUMBER. ( itin ). TABLE OF CONTENTS. 3 INTRODUCTION. 4 FREQUENTLY ASKED QUESTIONS. 5 RECENT CHANGES. 5 RENEWALS. 6 NEWLY ASSIGNED SSN. 6 CONFIDENTIALITY OF itin INFORMATION . 7 FRAUD WARNING. 8 TAX PREPARATION ASSISTANCE. 8 ELIGIBILITY FOR itin 9 HOW TO FILE. 10 HOW TO APPLY. 10 WHEN TO APPLY. 11 WHERE TO APPLY. 12 ACKNOWLEDGEMENTS. 12 ABOUT US. Educators for Fair Consideration (E4FC). Iliana G. Perez 2. INTRODUCTION. The purpose of this guide is to provide INFORMATION and UPDATES about the Internal Revenue Service's Individual Taxpayer identification Number ( itin ). It is important to understand the role of ITINs given the implications of potential changes to immigration policy and programs with the new administration. Basic Facts: An Individual Taxpayer identification Number ( itin ) is a tax processing number issued by the Internal Revenue Service. The Internal Revenue Service (IRS) issues ITINs to individuals who are required to have a 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).

2 ITINs allow individuals ineligible for an SSN to (1) report their earnings to the IRS, (2). open interest-bearing bank accounts with certain banks and, (3) conduct business in the The IRS issues ITINs regardless of immigration status, because both citizens and noncitizens may have a tax filing or reporting requirement under the Internal Revenue Code. ITINs are intended primarily to facilitate federal tax reporting. An itin does not authorize work in the or provide eligibility for Social Security benefits or the Earned Income Tax Credit. This guide will walk readers through the initial application and renewal process. A. separate guide discussing the use of ITINs to earn a living as an independent contractor and entrepreneur is currently being written and will be released in early January. 3. FREQUENTLY ASKED When does renewal of ITINs begin? QUESTIONS. January 1, 2017. Which ITINs are expiring? Individuals who hold ITINs with middle digits of 78 and Some of the most frequently asked questions (FAQs) re- 79 ( 9NN-78-NNNN).

3 The IRS began sending Letter garding ITINs are answered in this guide , including the 5821 to taxpayers with these expiring ITINs in Summer following: 2016. Can undocumented individuals apply for an When may I renew my itin ? itin ? Taxpayers whose ITINs will expire on January 1, 2017. Yes. Any individual not eligible for a SSN may apply and can begin the renewal process beginning October 1, file for an itin . 2016. Are ITINs valid for identification ? How do I renew my itin ? No. ITINs are not valid identification outside the federal Complete your federal tax return, complete W-7 form tax system. Since ITINs are strictly for tax processing, and provide original documentation (or certified copies the IRS does not apply the same standards as agencies of the documentation from the issuing agency) required that provide genuine identity certification ( state IDs/ to support the INFORMATION provided on Form W-7. driver's license, passports, green cards, etc.). Should I apply or renew an itin if I have a valid Can I open a bank account with an itin ?

4 SSN? Yes. Some banks will accept the itin instead of the No. Any person who applied for and received an SSN. SSN. However, you still need to provide some form of will no longer be eligible for an itin , since his/her SSN. identification . We suggest calling or visiting your local remains valid, even if his/her work authorization expires. bank or credit union1 to ensure they accept the itin and inquire about the types of ID they accept. Should I apply or renew an itin if I am a DACA. recipient? Do ITINs enable someone to work legally? No. If you obtained DACA and used it to get a SSN you No. ITINs are for federal income tax purposes only. Get- should not continue to use or renew your itin . Regard- ting an itin does not change your immigration status or less of the possible termination of DACA, the assigned your authorization to work in the United States. SSN will remain your SSN even if the individual's work authorization terminates. Can ITINs be used as proof of identification to obtain a state driver's license?

5 No. ITINs are not valid for identification outside the feder- al tax system. However, some states may accept the itin . as part of the driver's licence application or verification of residency. Who should renew their itin ? Anyone who has not used their itin on a federal tax re- turn at least once in the last three years should renew. All ITINs issued before 2013 will begin expiring this year based on a rolling schedule. You will be notified via postal mail (using the address on your most recent income tax form on which the itin appears) if your itin is expiring. 1 Bank of America, Chase, Wells Fargo and Capital One are some of the banks that accept ITINs. 4. RECENT CHANGES RENEWALS. Several changes have been made to the itin application What Happens Once an itin is Renewed and process since its inception in 1996. Once renewed, an itin will remain in effect unless it is not used on a tax return for three consecutive years. It is Since 2003 the IRS began to tighten standards for important to note that the issuance date of a renewed issuing ITINs by requiring tax returns as proof that the itin is the date the itin was originally issued, not the itin would be used for tax administration renewal date.

6 The IRS also announced that it would change the appearance of the itin from a card to a letter to avoid What May Happen if an itin is Not Renewed possible similarities with the SSN card. No other major Some individuals may not be aware that their itin . changes occurred from 2003 until 2012, when the has expired or that they must renew an expired itin . IRS announced revised procedures for the 2013 filing According to the IRS, returns filed by these individuals season, requiring original documents or copies certified will be accepted by the IRS; however, there may be a by the issuing agency for most applications. Moreover, delay in processing these returns, and certain credits, on November 29, 2012, the IRS announced for the first such as the Child Tax Credit6 and the American time that ITINs would expire after five They also Opportunity Tax Credit7, may not be allowed unless the announced that Certifying Acceptance Agents (CAAs) itin is renewed. This could result in a reduced refund would be allowed to engage in the itin application or additional penalties and interest.

7 The IRS will notify process by reviewing original documents or copies these filers about the delay and any reduction in refunds certified by the issuing agency. and credits claimed and will inform them about the need to file Form W-7 to renew their itin . A new policy was introduced on June 30, 20164, but it became obsolete with the passage of the Tax Hikes According to NILC, the disadvantage to not renewing Act of 2015 (PATH Act)5, enacted on December 18, is that an individual who earns the threshold amount of 2015. The new law states that ITINs that have not been income in a tax year that triggers the filing requirement for used on a federal tax return at least once in the last three someone with their tax filing status ( single, married years would no longer be valid for use on a tax return filing jointly, head of household, etc.) is required by law unless renewed by a taxpayer. In addition, ITINs issued to file a tax return and would need an itin to do so.

8 Prior to 2013 and not used on a federal tax return in the Records of tax filings can also be helpful (and sometimes last three years need to be renewed starting October 1, are sought by immigration law judges) during the 2016, based on a rolling renewal schedule. Starting in immigration adjustment process. For more INFORMATION Summer of 2016, the IRS began mailing Letter 5821 to on the benefits for immigrants of filing income tax individuals holding ITINs with the middle digits of 78 or returns, please see NILC's guide , Individual Taxpayer 79, informing them to renew their ITINs. identification Number ( itin ): A Powerful Tool for 2 IRS Announces Revisions to itin Applications (Dec. 17, 2003), Immigrant Taxpayers8. applications 3 IRS Strengthens Integrity of itin System; Revised Application Procedures in Effect for Upcoming Filing Season (Nov. 29, 2012), 6 Undocumented immigrants are currently eligible for the Child of- itin -system-revised-application-proce dures-in-effect-for- Tax Credit and the refundable portion (called the Additional Child upcoming-filing-season Tax Credit).

9 It is expected that the incoming Congress will attempt to change the law to prevent this, as they have in past legislative 4 Unused ITINS to Expire After Five Years; New Uniform Policy sessions. Eases Burden on Taxpayers, Protects itin Integrity (June 30, 2014), 7 Undocumented students may be eligible for the American expire-after-five-years-new-uniform-poli cy-eases-burden-on- Opportunity Tax Credit as long as they meet the substantial taxpayers-protects- itin -integrity presence test found in the 2015 Tax guide for Aliens found here: 5 Implementation of PATH Act itin Provisions, gov/pub/irs- 8 5. NEWLY ASSIGNED SSN INFORMATION Specific to DACA Recipients DACA recipients are eligible to receive a social security number (SSN) and therefore should not continue to use Holders of Expired ITINs Who Have Obtained or or renew their itin . Regardless of the possible termination Become Eligible for a SSN of DACA, the assigned SSN will remain their SSN even if An individual with an expired itin who has obtained or the individual's work authorization terminates.

10 As stated become eligible for an SSN (for example through DACA) above, all people who have obtained a SSN should should not renew the itin and should discontinue using send letters to the IRS and credit agencies requesting it. It is improper to use both the itin and the SSN to transfer all tax and credit history from the itin to their assigned to the same person to file tax returns. SSN. How to Notify the IRS About Your New SSN. It is your responsibility to notify the IRS so it can combine CONFIDENTIALITY OF itin . INFORMATION . all of your tax records under one identification number. If you do not notify the IRS when you are assigned a SSN, you may not receive credit for all wages paid and taxes withheld, which could reduce the amount of any refund due. Individuals who become eligible to obtain a itin INFORMATION is partially protected by Internal Revenue SSN ( DACA or permanent residents) should obtain Code 6103, which generally prohibits the IRS from one from the Social Security Administration (SSA) and disclosing taxpayer INFORMATION , including to other federal visit a local IRS office9, or write a letter explaining that However, there are important exceptions that you have now been assigned a SSN and want your tax you should be aware of.