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New ITIN Procedures for 2013 Filing Season

By: Chuck Strauss

January 18, 2013

In October 2012, the IRS announced modifications and restrictions it put in place with the intent of strengthening the individual Taxpayer Identification Number (ITIN) program. As it promised back then, some refinements to those procedures have now been issued, effective January 1, 2013, for the 2013 filing season.

The IRS changed from an ITIN card to an authorization letter to avoid any possible similarities with a Social Security Number card. Current ITIN holders’ cards will not be replaced. They should continue to use the numbers previously issued when they are required to supply an identification number for tax purposes.

One of the more stringent new requirements is that new ITINs will be effective for only five years, after which time taxpayers have to apply for a new one.

Under the “old rules” – prior to June 2012 - ITINs could be issued based on notarized copies of required documents such as passports or birth certificates. This is no longer the case.

Under the new procedures, ITIN applications will continue to require either original required documents or certified copies of those documents from the issuing agencies. Acceptable documents include passports, national identification cards, visas issued by the U.S. State Department, U.S. or foreign military identification, U.S. or foreign driver’s licenses, civil birth certificates, medical and school records, and other items.

Certifying Acceptance Agents (CAA) will be able verify the authenticity of identification documents for ITIN applicants and their spouses without sending the original documents to the IRS.  However, ITIN applications for dependents must still be submitted with original documents. A CAA is an Acceptance Agent (AA) who provides help for the ITIN application process. These AAs are a person, business or organization (college, accounting firm or financial institution) authorized by the IRS to help immigrants and other foreign people who are ineligible to receive a Social Security number.  They can obtain an ITIN (or an Employer Identification Number).

(The standards for CAAs have been significantly strengthened by allowing only those who are covered under the professional standards of Circular 230—attorneys, CPAs, enrolled agents, and registered tax return preparers—to qualify as CAAs. CAAs are also now required to complete a forensic document identification training course. )

The IRS also announced heightened review of documentation related to child tax credits by requiring more information to be sure residency requirements for these credits are met. This is probably in response to concerns about nonresidents successfully claiming these credits.

These new rules do not apply to military spouses and dependents without a Social Security number who need an ITIN, or to nonresident aliens applying for ITINs for the purpose of claiming tax treaty benefits. In addition, taxpayers who filed their 2011 returns on extension and students and exchange visitors participating in the Student and Exchange Visitor Program (SEVP) are not subject to these new rules. 

For further information, click here to see the IRS Revised Application Standards for ITINs which includes a link to apply for the necessary Form W-7, a list of documents acceptable for the process and other information.

The IRS has promised to set up conveniently located Taxpayer Assistance Centers  in  2013 where dependents’ documents can be reviewed so taxpayers do not have to part with originals. These are expected to become available late in January 2013.