IRS describes ITIN changes, renewals

The IRS announced that some taxpayers with unused or expiring Individual Taxpayer Identification Numbers (ITINs) will need to renew them. The Protecting Americans from Tax Hikes (PATH) Act of 2015 (P.L. 114-111) changed the ITIN rules. ITINs that have not been used on a federal tax return at least once in the last three years will no longer be valid unless renewed by the taxpayer. Also, ITINs issued prior to 2013 that have been used in the last three years will need to be renewed starting in the fall of 2016. The IRS has issued Notice 2016-48 explaining the changes, the IRS’s implementation procedure and consequences to taxpayers who fail to renew their ITIN.

Debra Holland, commissioner, IRS Wage and Investment Division, told reporters at an August 4 news conference in Washington, D.C., that the changes apply to two groups of ITIN holders. “The first group encompasses people who have not used their ITINs on a federal tax return at all in the last three years. That means they have not been used on a tax return in 2013, 2014 or 2015.” Their ITINs will expire at the end of 2016. “The renewal period for this group begins October 1, 2016,” Holland said.

“The other affected group involves people who have an ITIN that was issued before 2013. Those ITINs begin expiring at the end of this year. These ITIN numbers will be renewed on a rolling basis, with the first group starting on October 1, 2016,” Holland added. “The first ITIN holders up for renewal in this group will be people who have ITINs with middle digits of 78 or 79,” according to Holland.

The IRS intends to send approximately 400,000 letters to individuals with these middle digits.

“We don’t need people to renew their ITINs at this time unless they are in one of these two specific groups,” Holland said. However, taxpayers with ITINs that are going to expire soon should not delay taking action. “It’s better to do it this fall than wait for tax time next year,” Holland added.

Taxpayers needing to renew an ITIN should file Form W-7, Application for IRS Individual Taxpayer Identification Number. “To reduce the paperwork burden on households were several people will need to renew their ITIN we created the family option,” Holland said. “If any individual having an ITIN middle digit of 78 or 79 receives a renewal letter from the IRS, they can choose to renew the ITINs of all of their family members at the same time starting October 1, 2016.” Overall, some 11-million individuals have ITINs, Holland told Wolters Kluwer. (IRS News Release IR-2016-100, August 4, 2016, Notice 2016-48, IRB 2016-33, August 4, 2016.)

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