Practitioner's Guide to the Filing Season

From TaxAlmanac

2005 Tax Hints

2005 Tax Hints - Practitioner's Guide to the Filing Season

Here is the link to the IRS 2005 Tax Hints - Practitioner's Guide to the Filing Season. Click on the link to view. 2005 Tax Hints

Individual Taxpayer Identification Number (ITIN) Reminders for Tax Professionals

Individual Taxpayer Identification Number (ITIN) Reminders for Tax Professionals

Filing with an ITIN --

• The IRS issues ITINs for federal tax purposes, and ITINs should be used for tax reporting only.
• ITINs do not authorize a person to work in the U.S. or provide eligibility for Social Security benefits.
• If a client presents an ITIN and a Form W-2 showing an SSN, the tax return must be filed on paper. E-file rules do not permit an Electronic Return Originator (ERO) to alter information on a wage document, and mismatched taxpayer identification numbers will cause an e-filed return to reject.
• If a primary taxpayer, spouse, or both have ITINs, they are ineligible to receive the Earned Income Tax Credit (EITC), even if their dependents have valid SSNs. If the taxpayer and spouse (if filing jointly) have valid SSNs, only dependents with valid SSNs – not ITINs – qualify to receive EITC.

Seeking an ITIN --

• ITIN applicants must show a federal tax purpose for seeking ITINs. Most will demonstrate a tax purpose by attaching an original federal tax return to Form W-7, Application for Individual Taxpayer Identification Number (revised Dec. 17, 2003), and mailing, with their proof of identity documents, to the IRS address listed in the Form W-7 instructions.
• In cases where a current year tax return has already been filed that excluded a spouse or dependent who needs an ITIN, the taxpayer should complete Form 1040X, Amended U.S. Individual Income Tax Return, showing the ITIN applicant’s information, and attach it to Form W-7.

Documents with W-7 for ITIN --

• The IRS accepts, and encourages Acceptance Agents and Tax Professionals to use, certified or notarized copies of documents with the Form W-7.
• Documents must be: certified copy by the issuing agency, or certified/notarized copy by:
  • 1) a State Department employee (U.S. notaries at Embassies and Consulates worldwide),
  • 2) a U.S. Military Judge Advocate General Officer,
  • 3) foreign notaries authorized under the Hague Convention, or
  • 4) a U.S. notary public.

[For number 3, an Apostille must accompany the supporting documentation. The U.S. Department of State web site has further information on the Hague Convention and participating countries.]

• The supporting documentation must be consistent with the applicant's information provided on Form W-7. For example, the name, date of birth, and country of citizenship must be the same as on lines 1a, 4, and 6a of the Form W-7.

See Frequently Asked Questions for more details on ITINs.

Source: IRS.gov