Managing Director, American Tax Returns Ltd American Tax Returns Ltd
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US tax returns? ITIN renewal "season" starts this month

10th Oct 2016
Managing Director, American Tax Returns Ltd American Tax Returns Ltd
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This post discusses an urgent US tax deadline.  Many folks in the UK are right now receiving letters from the IRS (United States Internal Revenue Service) headed: “You must renew your Individual Taxpayer Identification Number (ITIN) to file your U.S. tax return”.

As part of recent anti-fraud measures, tens of thousands of individuals who have a US Individual Taxpayer Identification Number, or ITIN, are being required to renew their ITIN for the very first time.

An ITIN is an identifying number issued by the IRS (United States Internal Revenue Service) to someone who is not a US citizen.

Do you need to renew?

You will need to renew your ITIN before 31 December 2016 if either:

The middle digits of the existing ITIN are 78 or 79; or:

The ITIN has not been used at least once on a US tax return in the last three years. This means that if the ITIN was not used on a US tax return at least once for the US tax years 2013, 2014, or 2015, that the ITIN will simply expire at the end of 2016.

The IRS may send you a letter (known as Letter 5821) https://www.irs.gov/individuals/understanding-your-letter-5821.  

What Should You Do Next?

There are only two methods to apply for a renewal ITIN:

1. Mail the IRS Form W-7 and original identification documents (such as an original passport) to the IRS in Austin, Texas, USA, or

2. Use an IRS authorised Certified Acceptance Agent (CAA), local to where you live.  

Other Important Information

The IRS received over 900,000 ITIN applications last year, but rejected 31 per cent from everything they received! A good IRS Certified Acceptance Agent will know exactly how to avoid any rejections, so truly will be your best friend forever, given how little time remains to renew so many ITINs.

Next Steps?

Apply for a renewal ITIN as early as you can.  The IRS provide contacts to help you find a Certified Acceptance Agent (CAA) here: https://www.irs.gov/individuals/acceptance-agents-united-kingdom

Selecting from the IRS list of CAAS might appear confusing; but it should be the same as choosing any other adviser. Find out if the CAA is qualified in both the US and the UK? Ask how many of their ITIN applications last year were rejected by the IRS? Ask how many years they have been a CAA? You simply don’t want to be among the 31% of applications that the IRS will reject this year; so a good CAA should have a minimum of 5 years of experience to have seen all of the problems that the IRS might create and understand how to get these resolved quickly.

Best of luck; start renewing soon!

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By arnold28
13th Oct 2016 11:21

You note that the requests are being issued where "The ITIN has not been used at least once on a US tax return in the last three years. This means that if the ITIN was not used on a US tax return at least once for the US tax years 2013, 2014, or 2015, that the ITIN will simply expire at the end of 2016."

Presumably, if no filings were made and the IRS is aware, major penalties will not be long in coming....

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