New IRS Requirements for Foreign Taxpayer is Topic of Blog

SARASOTA, FL, August 17, 2012 (Press-News.org) Complying with U.S. tax regulations has become more taxing for foreign individuals who are not eligible to obtain a social security number. New Internal Revenue Service requirements for foreign individuals requesting Individual Taxpayer Identification Numbers (ITINs) are the topic of a recent blog posted by attorney and Certified Public Accountant Jo Ann Koontz on koontzassociates.com.

The new interim application requirements, announced June 2012, will remain in effect through the end of the year and, according to the IRS, "are designed to strengthen and protect the integrity of the ITIN process while minimizing the impact on taxpayers."

Previously, an ITIN application (Form W-7) simply required a notarized copy of an applicant's passport to confirm his or her identity. Now ITIN applicants must supply original documentation, such as passports, birth certificates or certified copies of such originals from the issuing agency. If an applicant was issued a passport in his or her home country, he or she would be required to either surrender the original passport to the IRS in order to submit an ITIN application, or obtain written certification of a copy of the passport from the issuing office in his or her home country.

"These requirements are sure to be an inconvenience for applicants who do not have the time to travel to the location of the appropriate issuing agency, or surrender original identification documentation which may be necessary for their ability to travel in the near future," Koontz writes. "Due to the novelty of the new requirements, passport offices may lack a program or procedure for making the requisite certifications. Even more, it is unclear as to what constitutes certification. The IRS has not provided specific instructions regarding the manner in which copies must be certified."

Furthermore, while certain ITIN applicants are not subject to the new requirements - such as spouses and dependents of U.S. military personnel, nonresident aliens applying for ITINs to obtain tax treaty benefits, and nonresident aliens subject to third-party withholding for various income - applications filed under these exceptions have still been rejected.

Final rules will be issued prior to the 2013 filing season, which is predominantly when ITIN applications are submitted.

Koontz & Associates, PL focuses on residential and commercial real estate transactions, tax law and business law. The law firm is located at 1819 Main Street, Suite 215, Sarasota, Florida 34236. Jo Ann Koontz can be reached at (941) 225-2615 or joann@koontzassociates.com.