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Modified Procedures for Renewing ITINs

11.08.2016

IRS Instructions for Form 8960The IRS has announced that taxpayers may now submit renewal applications for Individual Taxpayer Identification Numbers (ITINs). In Notice 2016-48, the IRS updated procedures to renew ITINs to reflect the Protecting Ameri­cans from Tax Hikes Act of 2015 (PATH Act).

Generally, a taxpayer identification number is the individual’s Social Security number (SSN). In the case of individuals who are not eligible to be issued an SSN, but who still have a tax filing obligation, the IRS issues ITINs. Under the PATH Act, any ITIN not used on a federal tax return for three consecutive tax years, either as the ITIN of an individual who files the return or as the ITIN of a dependent included on a return, will expire on December 31 of the third consecutive tax year of nonuse. This rule applies to all ITINs regardless of when the ITIN was issued. For ITINs issued before 2013, the PATH Act provides that ITINs will no longer be in effect according to a certain schedule, unless the ITIN has al­ready expired due to nonuse for three con­secutive years.

Only ITIN holders required to file a return in 2017 need to renew their ITINs, the IRS explained. Taxpayers with ITINs that have not been used on a federal income tax return in the last three years will not be able to file a return unless their ITINs are renewed.

Further, ITINs with the middle digits 78 or 79 must be renewed even if the taxpayer has used it in the last three years. In addition, these taxpayers also have the option to renew ITINs for their entire family at the same time. Taxpayers who have received a renewal letter from the IRS can renew a family’s ITINs together even if family members have an ITIN with middle digits other than 78 or 79.

Allison L. Jasper, CPAIf you have any questions about identification numbers or other tax planning issues, please contact your tax advisor or Allison Jasper, Manager, Tax Services, at 314.983.1276 or ajasper@bswllc.com.

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