1. W-7 and ITIN Training

2. What will you learn today?
Purpose of ITIN
Accurate completion of Form W-7
ITIN application process
Certifying Acceptance Agent role

3. What is an ITIN? Individual Taxpayer Identification Number
Same format as SSN; begins with number 9
Issued by IRS
May be a card, may be a letter

4. What is purpose of an ITIN?
File federal income taxes
May be used by other entities (loans, mortgage, bank account, rent apartment, etc.)
DOES NOT give permission to work in U.S.
DOES NOT change immigration status
DOES NOT imply illegal presence

5. Who may apply for an ITIN?
Anyone without valid social security number who is required to file U.S. taxes and meets substantial presence test (183 days residence)
Spouse without SSN who lives anywhere
Dependents without SSN who live in U.S., Canada or Mexico

6. Legal issues Compliance with the law
Confidentiality – protected under IRC 6103
Legal right to work or live in U.S.
Affect on immigration status
Affect on public benefits

7. How do you apply for an ITIN?
Original tax return
Form(s) W-7
Prove identity and foreign status

8. Completing Form W-7
ONLY three reasons for applying in CTC: U.S. citizen/resident alien filing tax return, dependent or spouse of U.S. citizen/resident alien. Never nonresident alien - out of scope
Name configuration
Do not click box for birth name different than application name unless birth certificate present
Mailing address – ITINs sent here
Foreign address – only if applicant lives outside U.S.

9. Completing Form W-7 cont.
Gender
Required entries for country, city and state of birth. Enter “unknown” if client unsure
Country of citizenship required; usually home country
Required entries for ID documents. May enter “unknown” except for document type.
Date of entry in U.S. impt. Help estimate date if needed. Determines Substantial Presence Test.

10. Completing Form W-7 cont.
Substantial Presence Test:
U.S. resident for tax purposes if physically present in U.S. for at least:
31 days during tax year and
183 days during 3-year period of tax year and 2 years immediately before tax year, counting:
All days present in 2016
1/3 of days present in 2015
1/6 of days present in 2014

11. Completing Form W-7 cont.
Seriously?? In plain English:
Your client tells you she entered the US on August 1, 2015, and has lived here ever since.
Jan 1, 2016 – Dec 31, 2016 = 365 days
Aug 1, 2015 – Dec 31, 2015 = 153 days/1/3rd = 51 days
What if she entered on August 1, 2016?
Aug 1, 2016 – Dec 31, 2016 = 153 days
If Substantial Presence Test failed, must file Form 1040NR (non-resident). Out of scope.

12. Completing Form W-7 cont.
Most never had foreign tax ID nor previous TIN or EIN.
If they say they have a number, call ITIN hotline first rather than applying again ( )
If student or scholar, refer to UT International Office.

13. Applicant signature Each applicant signs their own W-7
If applicant not in U.S., W-7 must be mailed for signature
If applicant under 14 years, parent or legal guardian may sign. Note: if niece or nephew, parent of child must sign, not primary TP.
Do not date signature; may only be valid for 5 days
Ensure don’t sign in Acceptance Agent’s Use box

14. Common mistakes Must be PAPER return – no e-file
Incorrect reason selected. Never use nonresident alien filing a U.S. tax return
Failing to prepare separate W-7 for each applicant
Failing to explain signature requirements
Giving client pre-addressed envelope to IRS processing center. These returns are NOT mailed to processing center; must be sent to ITIN Dept.

15. Documents required Original signed (by both if MFJ) tax return
Signed Form W-7 for each applicant
Proof of identity and foreign status
Passport only stand-alone document; otherwise
Two original unexpired documents from list in CTC flyer
ID documents must be originals and cannot be expired. School and medical records are current only if date on document within 1 year of ITIN application.
For adults one document must include a photo.

16. CTC process
Use for every applicant – primary, spouse and dependents
Do NOT claim EIC
Must file as PAPER return
Print 2 copies
Must NOT be mailed to IRS. Instruct client to take package to Certified Acceptance Agent, Acceptance Agent, or IRS office.

17. What is an Acceptance Agent?
Acceptance Agent – CTC is one!
Pursuant to written agreement, is authorized by IRS to review applicants’ ID documents
Required to mail all original documents
We can ensure client has all appropriate documents, saving time and money
Comfort zone

18. Protocol
Client goes to any CTC site for tax return prep. Original ID documents NOT required to prepare return.
Volunteer preparing return also completes Form(s) W-7
Print 2 copies
Explain signature requirement
Explain ID document requirement and ensure client has ITIN flyer
Instruct client to visit one of the Community Financial Centers during designated ITIN hours or IRS office on Rundberg (appointment required)

19. Resources
“Understanding Your IRS-Individual Taxpayer Identification Number” Publication 1915
ITIN Taxpayer Hotline
Janet Herrgesell,

20. Questions?