By: Coleman Jackson, Attorney, CPA
November 21, 2016
Individual Taxpayer Identification Number, otherwise known as (ITIN) allows taxpayers to meet their tax filing obligations who cannot obtain a Social Security Number. An ITIN is typically used by nonresident foreigners , undocumented resident foreigners, dependents and spouses of U.S. Citizens and resident foreigners who cannot get a social security number, and nonresident students, professors or researchers filing a U.S. federal tax return or claiming an exception, and anyone else who has a tax reporting obligation but cannot obtain a social security number. The ITIN, like a social security number, is a nine digit code. The ITIN begins with the number 9 and has fourth and fifth digits ranging from 50-65, 70-88, 90-92, and 94-99. These are the middle digits of the ITIN. The ITIN does not grant the holder any legal rights to reside in the United States. The ITIN does not grant the holder any right to work in the United States. The ITIN is issued by the United States Treasury (IRS). The ITIN is only used for tax reporting purposes.
ITIN holders beware! Section 203 of the Protecting Americans from Tax Hikes Act of 2015 (PATH Act), which became law on December 18, 2015 made critical changes to U.S. Tax Law, 26 U.S.C. Section 6109 as it relates to the Individual Taxpayer Identification Number (ITIN) Program. Because of these PATH Act changes, every ITIN holder must check their ITIN to determine whether it is expired or expiring soon. The PATH Act made major changes in the ITIN Program which requires holders of ITINs to renew their ITIN.
Holders of unused ITINs must renew them or they will expire. Any ITIN not used on a federal tax return for the last three (3) years. Count back from the current year to the previous three tax reporting periods. If it has been three years since the ITIN was used; it expires on January 1, 2017. That means that if you hold an ITIN that was not used in 2015, 2014 or 2013; your ITIN is no longer valid and cannot be used when you file your 2016 federal tax return; unless, you timely renew it. The IRS began accepting ITIN renewal applications on October 1, 2016 for taxpayers affected by the PATH Act.
ITINs issued before 2013 began expiring in 2016 on a rolling basis. The mandatory renewal period for these ITINs is on what the IRS is calling a rolling basis. The key numbers that triggers the expiration and mandatory renewal schedule as to when the pre-2013 ITIN renewal period began are the middle two digits of the ITIN. For example, beginning October 1, 2016, ITIN holders with middle digits of 78 and 79 began renewing their ITIN. Every ITIN holder must examine their ITIN and the ITIN of family members (household members) to determine when their ITIN expires or expired based on the IRS rolling renewal schedule.
Holders of expired ITINs could have difficulty complying with U.S. tax laws. They could be prohibited from claiming exemptions and dependents and so forth with expired ITINs. Moreover, failure to timely file required federal tax returns carry serious consequences under U.S. tax laws, such as, civil negligence penalties, fraud penalties and potential criminal prosecution. There could also be serious consequences under the Immigration and Nationality Act (INA) for failure to comply with U.S. federal tax laws (Internal Revenue Code). Federal tax law abuse violates the terms of immigrant visas under the INA in certain circumstances. ITIN holders must check their ITIN because the ITIN could be expired or expiring soon.
This law blog is written by the Taxation | Litigation | Immigration Law Firm of Coleman Jackson, P.C. for educational purposes; it does not create an attorney-client relationship between this law firm and its reader. You should consult with legal counsel in your geographical area with respect to any legal issues impacting you, your family or business.
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