A complex, globally-interdependent economy like what we have in the United States can sometimes yield complicated situations for its taxpayers. How can non-citizens, such as resident aliens, comply with US laws and pay their taxes when the Form 1040 and other filings require a social security number (SSN)? The solution to that is the “Individual Taxpayer Identification Number” (ITIN) issued by the IRS.
What’s the ITIN?
An ITIN helps individuals who are not eligible to obtain SSNs comply with federal tax filing requirements. They can’t be used for things such as claiming social security benefits or the earned income credit. ITINs are issued regardless of immigration status due to the fact that resident and nonresident aliens may have a requirement to file for US tax purposes.
For example, Fredo, a citizen of Italy, inherits property from a deceased sister in New York City. The property turns out to be a high-rise apartment generating rental income. Fredo now is on the hook for any US taxes related to that rental income! By obtaining an ITIN, Fredo can meet his tax obligations without having set foot in the USA.
Obtaining an ITIN
To obtain an ITIN, applicants must complete the W-7 form and submit it to the IRS by mail. The form asks for things such as name, foreign address, and original documents such as a passport. Processing time typically takes 4-6 weeks. Within that time frame, a mailed notice gets sent out to the applicant notifying that their ITIN has been assigned, OR their application was rejected and a notification why it was rejected.
The IRS authorizes “Certifying Acceptance Agents” (CAAs) to assist with the processing of ITINs. Utilizing a CAA can help applicants navigate the sometimes-complicated ITIN process and also avoid mailing sensitive identifying documents, such as passports. Interested in learning more about CAA services? Look no further. MiklosCPA, an IRS Certifying Acceptance Agent, has helped applicants obtain their ITIN number and also assist with any tax-related questions for their US tax filings. Contact us and learn how we can assist you, and follow us on our social media pages for future informative tax write-ups.