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< Back to current issue of Immigration Daily < Back to current issue of Immigrant's Weekly

Individual Taxpayer Identification Numbers

by Paula N. Singer, Esq.

The federal tax laws require individuals with U.S. income to comply with U.S. income tax filing obligations regardless of their immigration status or lack of legal immigration status. To comply with U.S. income tax filing requirements, an individual must have a U.S. taxpayer identification number (TIN). The TIN for a U.S. citizen is a U.S. Social Security number (SSN). Generally, only foreign nationals who are authorized to work under the U.S. immigration laws are eligible to apply for an SSN. In 1996, the IRS introduced the ITIN to provide individuals who are not eligible for an SSN with a means to comply with the tax laws. An ITIN is a nine-digit tax identification number (TIN) issued by the IRS. The number always begins with the number 9 and has a 7 or 8 in the fourth digit, e.g., 9XX-7X-XXX.

Individuals Eligible for ITINs

The following individuals, who are not eligible to apply for an SSN, are eligible to apply for an ITIN for a federal tax administrative purpose:

a. Nonresident alien required to obtain an ITIN to claim a tax treaty benefit
b.
Nonresident alien filing a U.S. tax return
c.
U.S. resident alien (based on days present in the United States filing a U.S. tax return)
d. Dependent of a U.S. citizen/resident alien
e. Spouse of a U.S. citizen/resident alien
f. Nonresident alien student, professor, or researcher filing a U.S. tax return or claiming an exception
g. Dependent/spouse of a nonresident alien holding a U.S. visa
h. Other (indicate pre-tax return exception number)

The letters correspond to the category letters on the Form W-7, Application for IRS Individual Taxpayer Identification Number. Individuals claiming a tax treaty benefit must include the treaty country and article number under which the benefit is claimed following category “h.”

Required Documentation

Applicants must submit documentation with their Form W-7 that substantiates the information provided on the form such as a valid foreign passport. The passport information such as the name, date of birth, and country of citizenship, must be the same as the information provided on Form W-7. Foreign nationals who do not submit a valid foreign passport must provide at least two or more of twelve approved documents listed in the Form W-7 instructions that are current and that verify identity with a name and photograph, and support the individual’s claim of foreign status.

The Form W-7 instructions state that the individual submit copies of original documents if the copies are 1) certified by the issuing agency or official custodian of the original record or 2) notarized by a U.S. notary public legally authorized within his or her local jurisdiction to certify that the document is a true copy of the original. To notarize a document, the notary must see the valid, unaltered original document and verify that the copy conforms to the original. The instructions note that notaries public are available at U.S. embassies and consulates worldwide. Foreign notaries are acceptable as outlined by the Hague Convention.

Application Procedures

Generally, individuals need to submit ITIN applications with the original tax return. Foreign nationals requiring an ITIN for the tax return for themselves and/or their dependents must submit their Form W-7 application(s) and required documentation with their original U.S. tax return to:

Internal Revenue Service
ITIN Operation
P.O. Box 149342
Austin, TX 78714-9342

The Form W-7 instructions caution such taxpayers not to use the address in their tax return instructions.

Pre-tax Return Applications

Many foreign nationals have a federal tax administrative requirement for an ITIN prior to submitting their tax return. For example, many foreign nationals receive income subject to withholding taxes in which the income and taxes are reported on information returns such as Form 1042-S, 1099-INT, 8805, or 8288, 8288-A or 8288-B. Also, under new regulations introduced in 2001, exemptions from withholding tax under an income tax treaty, except on income from publicly traded investments, must be claimed on a withholding certificate (Form 8233, W-8BEN, etc.) that includes a TIN.

The Form W-7 instructions issued in January 2007 include a list of four expanded exceptions that allow pre-tax return ITIN applications by individuals with income or expense subject to third-party reporting and by recipients claiming tax treaty benefits. For example, pre-tax return exceptions now include recipients of a taxable scholarship or fellowship grant subject to third-party withholding or tax exempt under a treaty. Instructions for Form W-7 include a helpful chart explaining the additional forms and letters that foreign nationals must submit for a pre-tax return ITIN application.

For more information regarding ITIN applications, refer to IRS Publication 1915, Understanding Your IRS Individual Taxpayer Identification Number.


About The Author

Paula Singer, Esq. chairman of Windstar Technologies, Inc. and partner in the tax law firm, Vacovec, Mayotte & Singer, Newton, MA, has over 25 years of experience providing advice and compliance services to employers on cross-border employment matters. For more information, visit www.windstar.com. For additional information, call 1-800-259-6398 or email: info@windstar.com.


The opinions expressed in this article do not necessarily reflect the opinion of ILW.COM.


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