Watch for Further IRS Pronouncements on ITINs

The AICPA has voiced concerns to the IRS about the Service’s interim rules, effective through Dec. 31, 2012, that foreign nationals must generally include original documentation (e.g., passports, birth certificates, or certified copies of such documents from the issuing agency) with Form W-7, Application for IRS Individual Taxpayer Identification Number. The Institute expressed these concerns in response to a number of calls it received from CPAs alarmed about the IRS’s June 22, 2012, announcement of these interim rules that tighten the procedures for issuing individual taxpayer identification numbers (ITINs) to foreign persons. While the IRS suggested that the new procedures would only impact a “small number of taxpayers” in 2012, numerous individual tax returns on extension through Oct. 15 are likely to be affected.

In collecting feedback from the AICPA and other stakeholders about the interim ITIN procedures, the IRS expects to issue final ITIN procedures before the start of the 2013 filing season, which is only a few months off. The IRS has provided certain exemptions from the interim ITIN procedures, such as for ITIN applicants who are spouses and dependents of U.S. military personnel and for nonresident aliens claiming tax treaty benefits. Nonresident aliens may need an ITIN for reasons besides filing a U.S. tax return. Persons exempt from the interim ITIN procedures should follow the documentation procedures in place prior to June 22.