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Many taxpayers are required to have an Individual Taxpayer Identification Number (ITIN). These individuals are likely to be affected by provisions contained within the  Protecting Americans from Tax Hikes (PATH) Act enacted by Congress in December 2015. The PATH Act sets forth a number of changes to how individuals can go about using ITINs, the requirements they must satisfy when renewing, and how often they must renew.

A Sacramento tax lawyer of the NewPoint Law Group would be happy to help you determine whether you need an ITIN for business or other purposes. We can also ensure that you are registered and compliant with all tax obligations. To schedule a confidential consultation, call  800-358-0305 or contact us online today.

What Is an ITIN and Why Do I Need One?

An ITIN is a type of identification that is used solely for federal tax purposes by the IRS. Similar to a Social Security number, an ITIN is 9 digits long and  is typically applied for by individuals who do not have a Social Security number, or who are unable to use their Social Security number due to identity theft and other types of fraud. Recent immigrants and individuals who do not intend to remain in the United States permanently often make use of an ITIN for tax purposes. Essentially, an ITIN is how the IRS identifies and keeps track of a taxpayer.

What Changes Are Coming to ITINs?

Under the PATH Act, many individuals who had previously been issued an ITIN will be required to renew the document, which they can do by filing Form W-7. There are two main scenarios where a taxpayer will be required to renew his or her ITIN to maintain compliance.

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First, taxpayers who already have an ITIN issued prior to 2013 will likely need to renew their ITIN. This is because all ITINs issued before 2013 will begin to expire this year. If your ITIN has the middle digits “78” or “79,” your ITIN is one of the first to expire and you should receive a notice from the IRS sometime in August. Starting October 1, 2016, you will be able to renew the ITIN.

The second scenario where a renewal is required is when a taxpayer has previously been issued an ITIN for federal tax purposes, but (s)he never made use of the ITIN for a tax filing. If the taxpayers have not used their ITIN during the last three tax years (2015, 2014, and 2013), then (s)he must file for a new ITIN starting on October 1, 2016.

What Do I Need to Do to Renew an ITIN?

An experienced attorney can guide you through each and every step of the process to apply for an ITIN and ensure that you have satisfied any additional tax obligations. As for renewing an ITIN, this is typically completed by obtaining, completing, and filing a W-7.

The W-7 must be submitted alongside supporting documentation that proves your identity. A potential stumbling block for ITIN renewals is that the IRS previously accepted passports which did not include a date of entry into the United States. Except for Canadian and Mexican passport holders, the IRS will no longer accept passports of this type to prove identity. Rather, taxpayers must submit additional, alternative forms of proof. For children aged 6 years or younger, U.S. medical records can serve to prove the child’s identity and address. Dependents under the age of 18 can also use U.S. education records to verify their identities. Finally, dependents age 18 and older can verify their identities and addresses with a variety of bills or items mailed to their home, including bank statements and utility bills.

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Work with a Strategic Sacramento Tax Attorney in California

The tax lawyers of the NewPoint Law Group are proud to help individuals and businesses satisfy their tax obligations. We can assist individuals and businesses in keeping up-to-date with changes in tax law and satisfying new and existing tax obligations. To schedule a confidential consultation with an experienced attorney, call our firm at 800-358-0305 or contact us online today.