Your ITIN May Be Expiring

The newly released IRS Notice 2016-48 contains important compliance changes for foreign individuals applying for an Individual Taxpayer Identification Number (“ITIN”). Foreign individuals may have previously applied for an ITIN to satisfy U.S. tax requirements, however, based on the new law, ITINs that have not been utilized on a federal return at least once in the past three years will no longer be valid, unless renewed. Furthermore, ITINs issued prior to 2013 must also be renewed. Without proper renewal compliance, tax returns may not be processed or refunds could be delayed.

Renewing an ITIN

•  Unused ITINs – If an individual’s ITIN has not been reflected on either a 2013, 2014, or 2015 income tax return, the ITIN will no longer be valid as of January 1, 2017. The period to renew will begin on October 1, 2016, and taxpayers must utilize Form W-7 (marked with a “Rev. 9-2016” revision date). The revised Form W-7 can be found here.

• Expiring ITINs – ITINs issued before 2013 will begin to expire and taxpayers will need to start renewing their ID numbers. ITINs are a nine digit number (similar to a SSN), with the following numbering sequence: XXX-XX-XXXX. The middle two numbers, XXX-78-XXX or XXX-79-XXXX, that contain a 78 or 79, will start to expire first and require prompt renewal.

In August 2016, taxpayers should have received notices from the IRS regarding the expiration of their respective ITINs. The notice also explained the ITIN renewal process. Only ITIN holders that require tax compliance with the U.S. authorities will need to renew; if there are no filing requirements necessary for 2016 or future years, no action is required at this time.

How to renew 

To renew, taxpayers must complete form W-7, Application for Individual Taxpayer Identification Number, utilizing version Rev. 9-2016. Taxpayers can submit their Form W-7 beginning on October 1, 2016. The IRS does not require a tax return to be included with Form W-7 with the remitted renewal application. Once completed, a taxpayer can either mail the form along with certain required certified documents to the IRS, make an appointment with the IRS Taxpayer Assistance Center, or utilize an Acceptance Agent to complete the filing. As with all Form W-7s, without the proper required documentation affixed to the form, the application can either be denied or delayed. The ITIN process and approval can be lengthy, so we recommend that the form and its attachments are properly submitted.

As an independent member of the BDO Alliance USA, our firm has access to BDO USA, LLP, which is a Certifying Acceptance Agent (“CAA”) and can assist with obtaining an ITIN and submitting any required forms. Please contact us for assistance.