In June 2012, the Internal Revenue Service (IRS) announced new interim application requirements (“New Requirements”) for individuals requesting Individual Taxpayer Identification Number (ITINs). ITINs are issued to foreign individuals who are not eligible to obtain a social security numbers. The New Requirements will remain in effect through the end of the year and, according to IRS, “are designed to strengthen and protect the integrity of the ITIN process while minimizing the impact on taxpayers.”
Prior to implementing the New Requirements, an ITIN application (Form W-7) simply required a notarized copy of an applicant’s passport to confirm his or her identity. The New Requirements now require ITIN applicants to supply original documentation, such as passports, birth certificates, or certified copies of such originals from the issuing agency. For example, if an applicant was issued their passport in their home country (i.e. Canada, United Kingdom, Czech Republic, etc.) to properly submit an ITIN application, such applicant would be required to either surrender their original passport to the IRS or obtain written certification of a copy of the passport from the issuing office in their home country.
These requirements will likely prove to be inconvenient for applicants who do not have the time to travel to the location of the appropriate issuing agency, or surrender original identification documentation which may be necessary for their ability to travel in the near future. Due to the novelty of the New Requirements, passport offices may lack a program or procedure for making the requisite certifications. Even more, what constitutes certification? IRS has not provided specific instructions regarding the manner in which copies must be certified.
The announcement issued by IRS stated that certain ITIN applicants are not subject to the New Requirements, such as spouses and dependents of U.S. military personnel, nonresident aliens applying for ITINs to obtain tax treaty benefits, and nonresident aliens subject to third-party withholding for various income. However, practitioners relying on such exceptions have recently received rejections of ITIN applications submitted pursuant to certain of these exceptions, specifically the exception for applications made for individuals subject to third-party withholding.
Final rules will be issued prior to the 2013 filing season, which is predominantly when ITIN applications are submitted.
