Individual Taxpayer Numbers To Expire, IRS Says

By Editorial 04 July, 2014

With effect from 2016, Individual Taxpayer Identification Numbers (ITINs) will expire if they have not been used on a federal income tax return for five consecutive years, the United States Internal Revenue Service (IRS) has announced.

The new policy applies to any ITIN, regardless of when it was issued. Only about a quarter of the 21m ITINs issued since the program began in 1996 are being used on tax returns. It is hoped that the measure will ensure that anyone who legitimately uses an ITIN for tax purposes can continue to do so, while at the same time resulting in the likely eventual expiration of millions of unused ITINs.

Developed in consultation with taxpayers, their representatives and other stakeholders, the new policy replaces the existing one that went into effect on January 1, 2013. To give all interested parties time to adjust and allow the IRS to reprogram its systems, the IRS will not begin deactivating ITINs until 2016.

Under the old policy, announced in November 2012, ITINs issued after January 1, 2013, would have automatically expired after five years, even if used properly and regularly by taxpayers. Taxpayers will therefore now no longer face mandatory expiration of their ITINs and the need to reapply starting in 2018, as would have been the case.

Though ITINs issued before 2013 were unaffected by the previous change, the IRS said at the time that it would also explore options for deactivating or refreshing the information relating to these older ITINs.

ITINs particularly assist in the collection of taxes from foreign nationals, resident, and nonresident aliens and others who have filing or payment obligations under US law. Designed specifically for tax administration purposes, ITINs are only issued to people who are not eligible to obtain a Social Security Number.

Tags: Individuals | Compliance | Tax | Tax Compliance | Law | Internal Revenue Service (IRS) | Tax Authority | United States | Individual Income Tax | Expats | Tax |


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