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Tag Archive for ITIN

IRS Acceptance Agents No Longer Will Be Situated Outside U.S. Borders

John Dundon

According to Sharon Bradley, Manager of the IRS’ ITIN Policy Section in the Atlanta, GA Service Center, Section 203 of the Protecting Americans from Tax Hikes Act of 2015 (PATH Act), Pub. L. 114-113, div. Q, enacted on December 18, 2015, modified Section 6109 of the Internal Revenue Code and resulted in significant changes to the Individual Taxpayer Identification Number (ITIN) program.

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PATH Act ITIN Renewal Requirements: All ITINs issued before 2013

TaxConnections Member Larry Stolberg

On December 18th, President Obama, signed H.R. 2029, the tax (the “Protecting Americans from Tax Hikes Act of 2015”) and spending bills (Consolidated Appropriations Act, 2016) to fund the government for its 2016 fiscal year.

The PATH Act ITIN renewal requirements: individuals who were issued Individual Taxpayer Identification Numbers (ITINs) before 2013 to renew their ITINs on a staggered schedule between 2017 and 2020 either in person before an IRS employee or a certified acceptance agent or by mail under procedures to be developed. Documentation proving identity, foreign status and residency is required for renewal. The Act also provides that an ITIN will expire if an individual fails to file a tax return for three consecutive years.

Similar rules apply to individuals residing outside the United States such as Canadians who applied for ITINS and file U.S. tax returns reporting their net rental income from U.S. real estate. It’s important to keep in mind that the

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Good To Know… Part 1 – From Larry Stolberg, CPA, CA

Larry Stolberg - 11-20-15

Short Blog Posts In One Location…

◊ U.S. Tax withholding for Canadians
Make sure you have the correct amount withheld from US income received. Generally amounts withheld in excess of treaty rates  will not be creditable in Canada. In order to get the a refund from the IRS, you will need to file a U.S. 1040NR return and apply for an ITIN (individual taxpayer identification number) with the ITIN office.
Waiver forms such as the W8BEN should be submitted  to the payor prior to the anticipated receipt of any US income to ensure the lower treaty rate (which could be 0%, 5%, 10% or 15%) in lieu of the US IRS code withholding rate of 30%. Interest, dividends, royalties, pension are usually the types of income  that are overlooked. Read more

What Has Jeeves Got To Do With Taxes?

TaxConnections Picture - Jeeves - white - square

If you know Jeeves, he is the fictional character in the series of humorous (read rib-tickling funny) short stories by P.G. Wodehouse. Jeeves is a very, very capable valet who gets his employer, Wooster out of many a sticky situation.

My father introduced me to P.G.Wodehouse’s books and there was no turning me back after that. The brilliant comic genius’ writing has kept me enthralled through long train rides, boring summer afternoons, quick breaks in the midst of grueling exams, you get the drift!

Now we may not all be able to afford a Jeeves in our lives, but a very common trend these days is to hire a nanny or an “au pair” if one has small gifts. Considering the sky-rocketing Read more

Oh My! You Have Substantial Presence In The US? Now You Have To File Taxes!

Businessman and calculator

I usually have clients who need substantial presence in the USA. Most times this is for a spouse and/ or a dependent in the country to apply for an ITIN when they would not otherwise qualify for a Social Security Number. It is also possible that the taxpayer himself needs to establish substantial presence in the US so he is able to make a “First Year Choice” for the previous year.

Some taxpayers whose parents make repeated trips from abroad and stay with the taxpayers for extended periods of time, may be able to apply for ITINs if they fulfill the substantial presence requirements. This usually results in the taxpayers claiming the parents as dependents for that year if other dependency tests are fulfilled. Read more

IRS Announces New Policy For Individual Taxpayer Identification Numbers / ITINs

TaxConnections Picture - IRS Magnifying Glass - square
What is an ITIN and What is it Used For?

An ITIN is a nine-digit tax processing number issued by the IRS for federal tax reporting only. The ITIN is not intended to serve any other purpose. The ITIN does not authorize one to work in the US and it cannot be used as an identification number or for any purpose outside the US tax system.

Who Needs an ITIN?

The IRS issues ITINs to individuals who are required to have a US taxpayer identification number but who are not eligible to obtain a Social Security Number (SSN). If an individual is eligible to obtain a SSN, he should NOT be applying for an ITIN. ITINs are issued to Read more

Issues With Streamline Program – Letter 4087?

iStock_tax on backXSmallAccording to Nathan Farkas, CPA, CA, CPA(NY):

Lately, a bunch of my clients have been getting letter 4087 from the IRS from the streamlined program. The letters are saying my clients did not submit signed tax returns, or signed FBAR forms or the signed questionnaire. I know that in all cases where my clients are getting these letters, all the requested documents were properly submitted to the IRS. I put together each package and made sure that all documents were included in the package.

Another thing I noticed on this is that in each case where a client got the letter 4087, there was an ITIN application for a family member, be it a spouse or a child. In all my streamlined cases, over 75% of cases where the client applied for ITIN numbers for a family member, they received a letter 4087 saying that returns or FBARS were missing. In over 75% of cases where there was no ITIN application, the returns were assessed and the case resolved in a fairly quick manner.

How have others been dealing with this situation and does anyone have a similar results from the streamlined processes?

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