November 29, 2012: IRS Revises ITIN System and the Impact on Certified Acceptance Agents
Foreign Account Tax Compliance Act (FATCA)
On November 29, 2012, the Internal Revenue Service released updated procedures strengthening the Individual Taxpayer Identification Number program (“ITIN”). The updated procedures take effect January 1, 2013 and build on interim procedures announced June 22, 2012 and October 2, 2012. Under the procedures, the IRS will continue to require original documentation or copies that are certified by the issuing agency with the exception of certain applications processed by a Certifying Acceptance Agent (“CAA”) like Deloitte Tax LLP. Notarized copies of documents will no longer be accepted for ITIN applications.
Under the procedures, a CAA will be required to review original documents or copies certified by the issuing agency from applicants, spouses and dependents. CAAs will be able to certify and then forward proof to the IRS that they have verified the authenticity of the documents supporting the ITIN application for applicants and spouses. This means they will not need to mail original documents such as passports to the IRS, a step previously required under the interim procedures. Instead, the CAA will send copies of the documentation reviewed. However, ITIN applications for dependents submitted to the IRS by CAAs will continue to require original documents or copies certified by the issuing agency.
For the first time, new ITINs will be issued for a five-year period rather than an indefinite period. This change will help ensure that ITINs are being used for legitimate tax purposes. Taxpayers who still need an ITIN will need to reapply at the end of the expiration period.
In addition to direct submission of documents to the IRS centralized site or use of CAAs, ITIN applicants will have several other avenues for verification of key documents. These options include some key IRS Taxpayer Assistance Centers (TACs), U.S. Tax Attachés in London, Paris, Beijing and Frankfurt, and at Low-Income Taxpayer Clinics (LITCs) and Volunteer Income Tax Assistance (VITA) Centers that use CAAs.