Obtaining Individual Taxpayer Identification Numbers

Overview

This article discusses the Internal Revenue Service requirements that non-residents of the United States apply for, and the various steps required to successfully obtain, an Individual Taxpayer Identification Number (“ITIN”)

The Form W-7, Application for IRS Individual Taxpayer Identification Number, is a form that has caused taxpayers more grief and frustration than any other form in many years. Please approach the completion of Form W-7 with caution.

Who Is Required To Have An ITIN?

Individuals must obtain an ITIN if they are required to file a U.S. tax return, or are claimed as a dependent on a U.S. tax return, and they do not have and cannot obtain a valid social security number (SSN). Even those individuals who have had U.S. temporary ID numbers for years must apply for an ITIN.

What If A Return Is Filed Without An ITIN?

The Internal Revenue Service will not process a return without a valid ITIN. Returns submitted without an ITIN are immediately returned to the taxpayer with a W-7 form. Processing of the return will be delayed until the return is resubmitted with a valid identification number.

How to File Form W-7

Form W-7 must be completed, and signed and dated by the applicant. The form requests general information such as the applicant’s name and address, country of birth, citizenship and family information as well as the reason the form is being completed (i.e. non-resident alien filing a U.S. return, dependent of U.S. person, etc.) if the taxpayer previously had a temporary Taxpayer Identification Number (“TIN”), make sure this number is reflected on the form so historical and carry forward information is transferred to the new ITIN account.

There are a number of ways to submit the completed Form W-7. The easiest way is to visit a Certifying Acceptance Agent (CAA) who will review the form to ensure that it is completed correctly, and will also certify the documentation verifying the applicant’s true identity and Canadian residence (identity documents). This eliminates the requirement of mailing original identity documents or certified copies to the Internal Revenue Service for verification. As the CAA certifies the supporting documentation and not the Internal Revenue Service, this method ensures that the form is processed on the first attempt. The CAA can also submit the completed form by fax to the Internal Revenue Service which significantly speeds up the application process.

Another way to submit Form W-7 is to mail it along with the originals or certified copies of the identity documents to the Internal Revenue Service. The Internal Revenue Service has very specific requirements for what they will accept as identity documents and what they will accept as certified copies. Unfortunately, the instructions for completing Form W-7 are somewhat vague in this area and it is very difficult to contact an IRS representative for clarification using the phone numbers provided in the instructions.

The Internal Revenue Service normally requires at least two original or certified identity documents be submitted with Form W-7. One of these documents must be picture identification. Some examples of satisfactory identity documents include: driver’s license, identity card, birth certificate, current passport, marriage license and/or school records.

A few of the more common scenarios and examples of identity documents that satisfy the Internal Revenue Service are as follows:

  1. Canadian residents requiring an ITIN to file a U.S. income tax return. A current driver’s license or passport and birth certificate should suffice as identity documents.
  2. An individual filing a U.S. income tax return requires an ITIN for a dependent claimed as an exemption on the return. Documentation should include evidence that establishes the relationship between the individual and the dependent such as a birth certificate as well as proof of continued existence such as current school records.

The Internal Revenue Service will only accept copies of identity documents if they are certified by the U.S. consulate or a U.S. notary, or persons approved as certifying acceptance agents for ITIN applications. The Internal Revenue Service will not accept copies of documents that are certified only by a Canadian notary or lawyer.

If the applicant chooses to have the documents certified by the U.S. consulate, we recommend that they contact the consulate at (604) 685-4311 prior to attending. It can be frustrating to make the trip only to find out that it is closed because of a U.S. statutory holiday or because the hours of operation have changed.

A further option is also available. The applicant can first have a Canadian notary or lawyer who is registered with the U.S. consulate certify copies of the original identity documents. The applicant must then send the notarized copies to the U.S. consulate where they will certify that the Canadian notary’s signature is registered with them. The Consulate will then return the copies to the applicant. We recommend that you contact the U.S. consulate for notaries or lawyers who are currently registered in your area. The phone number is (604) 685-4311.

Once you have completed form W-7 and gathered the documentation, the information may be submitted to the Internal Revenue Service in one of the following ways:

  1. Form W-7 and the originals or certified copies of the two pieces of identity documents may be mailed directly to the Internal Revenue Service. The IRS has stated that they will return originals within three days of receiving them. We do not recommend mailing the original documents on a journey that would include Canadian postal service, the U.S. postal service, the IRS, and back again.
  2. The applicant may visit an Internal Revenue Service office and present them with Form W-7 and the originals of the identity documents. They will review the form and documents while you wait and forward the W-7 to Philadelphia for final processing.

You can obtain a copy of W-7 Application for IRS Individual Taxpayer Identification Number form by visiting the IRS web site at www.irs.govand under the forms section at the top of the page, type in Form W-7.

The IRS usually processes Form W-7 within 6 to 8 weeks of receipt. The processing time is significantly reduced if a Certifying Acceptance Agent submits Form W-7 to the IRS by fax.

Conclusion

If you have any questions regarding the completion of Form W-7 or any questions related to the above U.S. tax matters, please do not hesitate in calling Joseph A. Truscott, Chartered Accountant at 905 528-0234 x. 224 or e-mail Joe at joetruscott@josephtruscott.com.