ITIN | TaxConnections

22 Jul 2019

Expiring ITINs? What You Should Know!

Many come to the United States on various work Visas and eventually bring their spouse and children to join them. Now these family members may not qualify for Social Security Numbers (SSN) and they have to apply for an Individual Taxpayer Identification Number (ITIN). The member of the family here on the work visa and consequentially an SSN can claim dependency credits and also be able to file jointly on their U.S. tax return with their spouse if conditions have been met and they qualify.

The 2017 Tax Cuts and Jobs Act now requires all applicants for Employer Identification Numbers to have either a Social Security Number or an ITIN. Non-resident individuals doing business in the US as a partner in a US partnership also require an ITIN to file their US tax returns and to be able to claim back taxes paid on their behalf by the US partnership.

Written by Manasa Nadig | Posted in TaxConnections

12 Apr 2018

Individual Taxpayer Identification Number (ITIN) Reasons And Qualification

You have to meet the return filing reason , or one of the exception-to-return-filing reasons. One cannot just arbitrarily apply for an ITIN as you must include documentation proving that you need one and that your reason aligns with IRS qualification requirements to receive one. The IRS sets out a finite prescribed list of qualification requirements – all split into two groups – IRS-return-filers OR exceptions. One reason that can be used for many applicants when they can’t qualify under other reasons, is owning many but not all types of USA bank accounts (so long as the US bank provides you with the required ITIN letter). Read More

Written by Daniel Gray | Posted in IRS • ITIN

15 Dec 2017

ITIN For Bank Account Or PayPal

IRS will not issue an ITIN in order to allow a non-resident alien to open a USA bank account, it will only issue an ITIN for an existing open account that makes payments subject to withholding tax. The old conundrum is that most USA banks will not open an account without an ITIN. IRS will not issue an ITIN in order to allow a non-resident alien to open a USA bank account, it will only issue an ITIN for an existing open account that makes payments subject to withholding tax.

Written by Daniel Gray | Posted in ITIN • TaxConnections

04 Jan 2017

Tax Changes Coming In 2017: What U.S. Expats Need To Know

While the past year did not produce any monumental changes to U.S. tax law, there are a number of noteworthy changes that expats should keep in mind as we enter 2017. We also share a few highlights from President-elect Trump’s current tax plan.

Written by Ephraim Moss | Posted in Tax Changes

07 Dec 2016

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

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.

Written by John Dundon | Posted in Individual Taxpayer ID Numbers • IRS • PATH Act

24 Dec 2015

PATH Act ITIN Renewal Requirements: All ITINs issued before 2013

On December 18^th, 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

Written by Larry Stolberg, CPA, CA | Posted in Individual Taxpayer ID Numbers • ITIN • PATH Act • Tax Policy

23 Nov 2015

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

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

Written by Larry Stolberg, CPA, CA | Posted in Canada • Expatriate • Tax Tips

08 Jun 2015

What Has Jeeves Got To Do With Taxes?

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

Written by Manasa Nadig | Posted in Income Tax • Individual • Small Business • Tax Provision/Tax Reporting

06 Oct 2014

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

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

Written by Manasa Nadig | Posted in FBAR • Individual

10 Jul 2014

IRS Announces New Policy For Individual Taxpayer Identification Numbers / ITINs

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

Written by Virginia La Torre Jeker, J.D. | Posted in Individual • IRS

18 Jul 2013

Issues With Streamline Program – Letter 4087?

According 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?

Written by tbeecher | Posted in United States