What is an ITIN? T.D. 8671, 1996-1 C.B.314

In 1996, the U.S. Treasury Department issued T.D. 8671, 1996-1 C.B.314 introducing the ITIN – Individual Taxpayer Identification Number – requiring people foreign to the USA to use a unique identification number on their United States federal income tax returns.

These regulations were intended to address concerns by the IRS and elected officials that without a unique number US taxpayers could not be effectively identified and their tax returns efficiently processed.

In the simplest of terms an ITIN is a tax processing number issued by the IRS for certain resident and nonresident aliens, their spouses, and their dependents. It is:

• a nine-digit number beginning with the number “9”, has a range of numbers from “70” to “88”, “90” to “92” and “94” to “99” for the fourth and fifth digits and is formatted like a Social Security Number.
• only available to individuals who are required to have a taxpayer identification number for tax purposes and are not eligible to obtain a Social Security Number from the Social Security Administration (SSA).
• applied for using IRS Form W-7.

Generally a U.S. Federal income tax return must accompany the ITIN application unless you meet one of the “exceptions” that I will blog about at a future date.

Because both resident and nonresident aliens may have United States Federal tax filing and payment responsibilities under the Internal Revenue Code, ITINs are issued regardless of immigration status to US Taxpayers not eligible for a Social Security Number. An ITIN does not:

• authorize work in the U.S. or provide eligibility for Social Security Benefits or the Earned Income Tax Credit.
• constitute a valid form of identification outside of the tax system.
• change immigration status.

When interviewing IRS employees staffing the ITIN processing center I was told that if you are an undocumented alien presently residing in the United States illegally:

• you need not fear applying for an ITIN as the information provided is used for tax purposes only and not (necessarily) shared with the Department of Homeland Security
• one major factor in making a deportation determination is whether undocumented aliens are compliant with their US tax filing and payment obligations.

So there you have it, go get yourself an ITIN and file your federal income taxes.