Insights: Article

Individual Taxpayer Identification Number Renewal Required

January 13, 2017

Earlier this year, the IRS gave notice of changes to the Individual Taxpayer Identification Number (ITIN) program. And, you might need to take action. 

What is an ITIN? According to the Internal Revenue Service (IRS), it's a tax processing number issued by the IRS to individuals who are required to file a U.S. tax return, but may not have, and are not eligible to obtain a Social Security number (SSN) from the Social Security Administration.

The changes will require some taxpayers to renew their ITINs before they will be able to file a tax return on or after Jan. 1, 2017. The IRS has warned ITIN holders that if they have an expired ITIN and don't renew their ITIN before filing a tax return in 2017, they could have refunds delayed and be ineligible for certain tax credits until the ITIN is renewed.

There are two ITIN groups that need to check on ITIN renewal, and this is only required if they will be filing a US tax return in 2017.

  • First, if the ITIN holder has not used the ITIN on a tax return for the filing years 2013, 2014 or 2015, their ITIN will not be valid for the filing of a tax year 2016 return on or after Jan. 1, 2017.
  • Second, ITINs issued before 2013 will begin expiring in 2016 and will need to be renewed on a rolling basis. ITINs follow the format 9XX-XX-XXXX, similar to a SSN. ITINs with middle digits of 78 or 79 (as in 9XX-78-XXXX) will be the first two sets of ITINs expiring under the rolling basis approach and will need to be renewed. The IRS started mailing letters to this group of ITIN holders in August to inform them of the need to renew.

To renew an ITIN, taxpayers will file Form W-7, Application for IRS ITIN and follow the instructions for renewal. However, the IRS will not require the attachment of a tax return to the Form W-7. The newest version of Form W-7 should be used (version Rev. 9-2016). And, there is a family renewal option that needs to be considered where appropriate.

There are three methods of submitting the Form W-7 and the related information. It can be mailed (follow the instructions), it can be provided to an authorized Certified Acceptance Agent, or delivered by appointment to an IRS Taxpayer Assistance Center.