International Tax Alert - September 2016

September 2016

Your Individual Taxpayer Identification Number May Be Expiring

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The newly released IRS Notice 2016-48 contains important compliance changes for foreign individuals applying for an Individual Taxpayer Identification Number (“ITIN”). Foreign individuals may have previously applied for an ITIN to satisfy U.S. tax requirements. However, based on the new law, ITINs that have not been utilized on a federal return at least once in the past three years will no longer be valid, unless renewed. Furthermore, ITINs issued prior to 2013 must also be renewed. Without proper renewal compliance, tax returns may not be processed or refunds could be delayed.
 

Renewing an ITIN

Unused ITINs – If an individual’s ITIN has not been reflected on either a 2013, 2014, or 2015 income tax return, the ITIN will no longer be valid as of January 1, 2017. The period to renew will begin on October 1, 2016, and taxpayers must utilize Form W-7 (marked with a “Rev. 9-2016” revision date). The revised Form W-7 should be available in September 2016.
 
Expiring ITINs – ITINs issued before 2013 will begin to expire, and taxpayers will need to start renewing their ID numbers. ITINs are a nine digit number (similar to a SSN), with the following numbering sequence: XXX-XX-XXXX. The middle two numbers, XXX-78-XXX or XXX-79-XXXX, that contain a 78 or 79, will start to expire first and require prompt renewal.
 
In August 2016, taxpayers will receive notices from the IRS regarding the expiration of their respective ITINs. The notice will also explain the ITIN renewal process. Only ITIN holders that require tax compliance with the U.S. authorities will need to renew; if there are no filing requirements necessary for 2016 or future years, no action is required at this time.  
 

How to renew

To renew, taxpayers must complete form W-7, Application for Individual Taxpayer Identification Number, utilizing version Rev. 9-2016, which should be available in September 2016. Taxpayers can submit their Form W-7 beginning on October 1, 2016. The IRS does not require a tax return to be included with Form W-7 with the remitted renewal application.  Once completed, a taxpayer can either mail the form along with certain required certified documents to the IRS, make an appointment with the IRS Taxpayer Assistance Center, or utilize an Acceptance Agent to complete the filing. As with all         Form W-7s, without the proper required documentation affixed to the form, the application can either be denied or delayed. The ITIN process and approval can be lengthy, so we recommend that the form and its attachments are properly submitted.
 

BDO Knows

BDO USA, LLP is a Certifying Acceptance Agent (“CAA”) and can assist with obtaining an ITIN and submitting any required forms. Please contact any member of BDO Acceptance Agent team for assistance in renewing your identification number.
 
Office BDO's Certified Accepting Agents 


Atlanta D. Scott Potts
Senior Manager, Expatriate Tax Services


Charlotte Donna Chamberlain
Managing Principal, Expatriate Tax Services


Charlotte Anita Schilling
Manager, STS - Expatriate Tax Services


Detroit Lucia Spevacek
Senior Manager,  Expatriate Tax Services


Houston Jim Miller
Managing Director, Expatriate Tax Services


Houston John Pao
Senior Manager, Expatriate Tax Services


Houston Mesa Hodson
Principal, Expatriate Tax Services


New York Sima Devi
Associate, Expatriate Tax