IRS Revises Individual Tax Identification Number Application
Posted Jan 02, 2004

The Internal Revenue Service (IRS) announced revisions in the application process for Individual Tax Identification Numbers (ITINs). The changes became effective the date of the announcement, December 17, 2003. The purpose of the revisions is to increase control over the issuance of ITINs. ITINs are important to foreign nationals who are ineligible for social security numbers as the ITINs are used in place of social security numbers for those persons. ITINs are often used by dependents of work authorized individuals, and because the ITIN applicants are often not authorized for employment in the U.S., the ITINs helps them to open bank accounts and to file tax returns. The IRS stated that the changes are aimed at assuring that ITINs are used for tax administrative purposes, as intended, rather than solely for identification purposes.

As of December 17, 2003, applications for ITINs must be filed on revised Form W-7, Individual Taxpayer Identification Number Application. The W-7 requires proof that the ITIN will be used for tax administration purposes. If the request is made to file a tax return, the tax return must be filed with the W-7. The reason for this change is that, according to IRS figures, one quarter of the people requesting ITINs for the purpose of filing a tax return never actually filed nor were they included as dependants on a tax return. The identity documents acceptable in making application are now limited to 13 types, a reduction from the 30 documents previously accepted. The appearance of the ITIN card will also change, so that it is not similar to the Social Security Number card.

For more information about ITINs, MurthyBulletin and MurthyDotCom readers may wish to review the IRS Individual Tax Identification Number FAQs available on the IRS WebSite. The revised Form W-7, and instructions for that Form, are also available on the IRS WebSite. The instructions contain the list of acceptable identification documents, as well as other filing instructions pertaining to different tax situations. We take this opportunity to remind MurthyBulletin and MurthyDotCom readers of the need to comply with U.S. tax laws. Failure to comply with U.S. tax laws can have significant legal and immigration consequences.