A W-7 Form is used to obtain an Individual Tax Identification Number or “ITIN.” An ITIN is a number used for tax filing purposes and is issued by the Internal Revenue Service (IRS) to those individuals required to have a U.S. taxpayer identification number but do not have, and are not eligible to obtain a Social Security Number (SSN) from the Social Security Administration (SSA).
The IRS began issuing ITINs in July of 1996. Because both resident and non-resident aliens may be required to file U.S. tax returns or have payment responsibilities under the Internal Revenue Code, ITINs are issued. Additionally, ITINs are used on individual income tax returns when claiming an exemption if one’s dependent or spouse does not have and is not eligible to receive an SSN.
An ITIN is a nine-digit number that always begins with the number 9 and has a 7 or 8 in the fourth digit, for example: 9XX-7X-XXXX. Unless they meet an exception, individuals must have a filing requirement and file a valid federal income tax return to receive an ITIN.
Examples of individuals who need ITINs include:
- Non-resident alien filing a U.S. tax return and not eligible for an SSN
- U.S. resident alien (based on days present in the United States ) filing a U.S. tax return and not eligible for an SSN
- Dependent or spouse of a U.S. citizen/resident alien
- Dependent or spouse of a non-resident alien visa holder
In addition to completing Form W-7, the applicant must provide other supporting documentation to receive an ITIN. The IRS will now accept 13 documents as proof of identity to obtain an ITIN. Once completed, the W-7 form can either be mailed along with the appropriate supporting documentation, to the address shown in the Form W-7 Instructions, presented at IRS walk-in offices, or processed through an Acceptance Agent authorized by the IRS. Provided the W-7 form is complete and that you qualify for an ITIN, one should receive notification from the IRS within four to six weeks of submitting an application.
ITINs are issued solely for federal tax reporting and cannot be used to serve any other purpose such as providing work authorization or proving eligibility for Social Security benefits. The ITINs, therefore, help individuals comply with the U.S. tax laws, and facilitate the efficient processing of tax returns and payments of those not eligible for Social Security Numbers. However, many people object to the issuance of ITINs as they are issued to those people living in the U.S. illegally in an effort to collect tax revenue from the broadest base possible. Essentially, with the exception of the Earned Income Tax Credit, illegal aliens who file tax returns receive the same tax benefits as legal foreign residents.
The IRS recently changed from issuing an ITIN card to an authorization letter to avoid possible similarities with SSN cards. Those holding ITINs will continue to keep the same number previously issued when they need to supply their ITIN for tax purposes. If you need help filing your taxes this year, you may want to consider both Turbo Tax and H&R Block. Their free online tax software can make your tax nightmares disappear.