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Nicholas Hartney, Licensed to Represent Taxpayers before the IRS | Snapshots of Current Tax Issues

Update on ITIN Process for Taxpayers Living Overseas

Recently I had written into the IRS to inquire about the overseas Acceptance Agents program and specifically how this is affecting taxpayers here in Germany.  The IRS has requested a correction to the law, but Congress has not taken any action to help foreign residents comply with obtaining an ITIN.  Here is what I was told: 

Thank you for contacting the ITIN Program Office.  We apologize for the delay in our response.

Section 203 of the Protecting Americans from Tax Hikes Act of 2015 (PATH Act) eliminated the option of using Certified Acceptance Agents (CAA) for ITIN applicants who reside outside of the United States.  IRS implemented this provision January 1, 2017, and, as a result, terminated all existing foreign CAAs as of that date. IRS is not currently approving practitioners or organizations that conduct business outside of the United States.

The PATH Act requires foreign applicants to mail Form W-7 to the IRS Campus in Austin, TX with original identification documentation, or certified copies from the issuing agency, along with their tax returns (or exception documentation). The applicants may request certified copies of their identification documents from the issuing agency, or at a U.S. Embassy or Consulate location, for submission with their W-7 applications.  Applicants should contact the Consular Section, American Citizens Services of the U.S. Embassy or Consulate in advance to determine the hours of operation for these services. Embassy or Consulate locations will not prepare or assist in the preparation of the W-7. If the applicants cannot obtain certified copies of their identification documentation, they must mail the original documents to the IRS with the W-7 application.

Applicants who are physically present in the United States on a temporary basis may make an appointment at an IRS Taxpayer Assistance Center in lieu of mailing original identification documents to the IRS.

Terminated foreign CAAs may continue to assist applicants with determining their eligibility for an ITIN, completing Form W-7, and explaining the supporting identification requirements (submitting original documents or certified copies from the issuing agency).  The organizations may not sign the W-7 as the preparer and should not prepare Form W-7(COA), Certificate of Accuracy for IRS Individual Taxpayer Identification Number.  The IRS would directly notify the applicant of the status of their W-7 application within 9 to 11 weeks.  In this manner, the organizations can continue to ensure that applicants are provided professional guidance to successfully complete the application process.

IRS has requested a technical correction to the law, but to no avail.  We understand the implementation of the law has caused difficulties for foreign residents to comply; however, we have to implement the law as written unless it is changed.