Time is running out for taxpayers who need to renew an expiring ITIN before next filing season.
In June, the IRS issued a press release reminding taxpayers that failing to renew an expiring ITIN can result in refund delays and ineligibility for some tax credits. While ITINs are only used by taxpayers who can’t get a Social Security Number, the IRS reported “nearly 2 million … are set to expire at the end of 2019.”
In the release, the IRS suggested two factors that could lead to ITIN expiration at the end of this year:
- “Under the Protecting Americans from Tax Hikes (PATH) Act, ITINs that have not been used on a federal return at least once in the last three consecutive years will expire Dec. 31, 2019”
- “ITINs with middle digits 83, 84, 85, 86, or 87 that have not already been renewed will also expire at the end of the year”
If either of those circumstances applies to ITIN holders who will need to file a tax year 2019 return, the IRS said they should “complete a Form W-7 and submit all required documentation.” In addition to providing a link to the form instructions, the IRS pointed out that taxpayers can renew ITINs for every member of their family at the same time.
To help taxpayers avoid problems when renewing their ITIN, the IRS put together a list of common errors. Here are the regular offenders:
- “Mailing identification documentation without a Form W-7”
- “Missing information on the Form W-7”
- “Insufficient supporting documentation, such as U.S. residency documentation or official documentation to support name changes”
ITIN holders need to have proof of U.S. residency for any dependents “from a country other than Canada or Mexico, or dependents from U.S. military personnel overseas” that they want to claim on their return. If the dependents’ passports are not stamped with the date of entry, then the ITIN applicants will have to supply other information, like medical and school records.
According to the IRS, affected taxpayers should have already started receiving CP48 Notices. If any of your clients are ITIN holders, now is as good a time as any to prepare for renewal questions. For more information, visit the “Individual Taxpayer Identification Number” page on IRS.gov. The IRS also offers videos explaining ITINs in English and Spanish.
Sources: IR-2019-118, “Individual Taxpayer Identification Number”
The Tax Place