Individual Taxpayer Identification Number

Individual Taxpayer Identification Number

In January 2013, the Internal Revenue Service (IRS) updated its procedures to make it more convenient and easier for persons not qualified for a social security number, to acquire Individual Taxpayer Identification Number (ITIN). Through this process, these individuals would obtain the Individual Taxpayer Identification through certifying acceptance agents.

 

Certifying Acceptance Agents are an entity (organization or business) or persons that have entered into a written contract with the Internal Revenue Service, to assist foreign legal entities or persons that are not entitled to an SSN but require the Taxpayer Identification Number. ITIN is important in the filing of tax returns, including Form 1040 and other related tax schedules.

 

The certifying acceptance agents are charged with the facilitation of the process of ITIN acquisition through authenticating identity details, review of documents such as your W7 Form, and finally submitting the complete foRm data to the IRS for processing of ITIN.

What is an ITIN?

Unless you are an alien who has had to submit some tax schedules, the term ITIN would not mean anything. So what is an ITIN? The ITIN in full is Individual Taxpayer Identification Number. The Internal Revenue Service generates and issues the number, which it uses to process the taxes of certain legal persons. Launched in April 2011, it is a nine-digit number system launched in 2012. The IRS issues the ITIN number to individuals that need to have American taxpayer identification, yet they are not eligible since they cannot apply for Social Security Administration (SSA) or a Social Security Number (SSN).

 

ITINs may be issued to both nonresident and resident persons and regardless of immigration status. The reason for this is that all nonresident and resident aliens have to file and report their earnings to the IRS. Unless you have an exception, to receive the ITIN requires you file valid federal income tax returns.

What is the purpose of the ITIN?

 

Legal foreign entities and other persons use an ITIN if they do not qualify for an SSN yet are expected to file requirements and tax returns. If you are an alien nonresident with any federal, tax reporting requirements, or are entitled to a tax refund according to the provisions of a treaty between your home country and the US, you would need an ITIN. An ITIN will also be essential if:

  1. You are a dependent or wife/husband of a non-resident alien visa holder
  2. If you are a spouse or dependent of a US resident alien or citizen
  3. You are a US Resident foreigner (having stayed in the United States for a stated period) needing to file an American tax return
  4. If you are a non-resident alien needing to file an American tax return

How to Know If You Need an ITIN

  1. If you are not authorized FOR an SSN and have never obtained it, yet are obligated to file a federal income tax return or present the IRS with a tax identification number, then you need the ITIN.
  2. If you have applied for the SSN, you need not file Form W-7, not unless the Social Security Administration informs you that you do not qualify for the Social Security Number. By law, alien persons cannot have both the SSN and the Individual Taxpayer Identification Number, and hence it is important to contact the SSA to determine your eligibility for the SSN.

 

Individual Taxpayer Identification Number

 

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