IRS RESPONSE TO RECOMMENDATION: The IRS is currently evaluating an option to verify government-issued passports electronically as part of the Individual Taxpayer Identification Number (ITIN) application process. Notably, 70% of documents submitted in support of an ITIN application are passports. The technology would allow for digital ID verification and authentication of taxpayer’s identity and Foreign Status in real-time. Implementation is contingent on findings and available funding.

CORRECTIVE ACTION: The IRS is currently evaluating an option to verify government-issued passports electronically as part of the Individual Taxpayer Identification Number (ITIN) application process. Notably, 70% of documents submitted in support of an ITIN application are passports. The technology would allow for digital ID verification and authentication of taxpayer’s identity and Foreign Status in real-time. Implementation is contingent on findings and available funding.

TAS RESPONSE: TAS supports this approach. Although the technology the IRS is evaluating would not apply to all government-issued identification documents, it would be a significant step in the right direction. Providing real-time identity authentication for 70 percent of submitted documents would free up ITIN staff resources for the review of the remaining 30 percent. Additionally, this technology could provide a blueprint for later introducing additional tools to authenticate other forms of government-issued documents.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Adopted

OPEN or CLOSED: Open

DUE DATE FOR ACTION (if left open): 9/30/2025

IRS RESPONSE TO RECOMMENDATION: As a part of overall efforts to support ITIN Modernization, the IRS is replicating the Form W-7, Application for IRS Individual Taxpayer Identification Number, application experience in Digital and Mobile Adaptive Forms, with validation fields. After the digital Form W-7 is completed online it can be printed, signed, and mailed, the same as the current unassisted application process. The target user group for this phase is primarily tax filers who do not get assistance through a TAC office or Voluntary Income Tax Assistance Center, and who do not use these third-party tax software preparation tools.

CORRECTIVE ACTION: As a part of overall efforts to support ITIN Modernization, the IRS is replicating the Form W-7, Application for IRS Individual Taxpayer Identification Number, application experience in Digital and Mobile Adaptive Forms, with validation fields. After the digital Form W-7 is completed online it can be printed, signed, and mailed, the same as the current unassisted application process. The target user group for this phase is primarily tax filers who do not get assistance through a TAC office or Voluntary Income Tax Assistance Center, and who do not use these third-party tax software preparation tools.

TAS RESPONSE: TAS supports this development. TAS’s understanding is that the digital Form W-7 walks taxpayers through the application requirements by using clear, interview-style prompts and then produces a completed Form W-7 that taxpayers can print, sign, and mail. This fits with what TAS envisioned for this recommendation and could eventually be expanded to include e-filing or digital submission.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Adopted

OPEN or CLOSED: Open

DUE DATE FOR ACTION (if left open): 7/31/2025

IRS RESPONSE TO RECOMMENDATION: The IRS processes ITIN applications year-round if the taxpayer meets at least one of the five exceptions to the tax return filing requirement. The federal tax return requirement protects the integrity of the ITIN program by ensuring ITINs are only procured for the purpose of the federal tax administration for which it is intended.

CORRECTIVE ACTION: N/A

TAS RESPONSE: The IRS allows year-round processing of ITIN applications only in limited circumstances that do not apply to most applicants. As discussed in the annual report, TAS disagrees that the federal tax return requirement is the only method or even the most reliable method to ensure that applicants are not committing fraud and need an ITIN. Limiting the processing of most ITIN applications to filing season, generally the IRS’s busiest period, creates additional burdens for both the IRS and ITIN applicants.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Not Adopted

OPEN or CLOSED: Closed

DUE DATE FOR ACTION (if left open): N/A

IRS RESPONSE TO RECOMMENDATION: The IRS agrees to implement programming changes to prevent ITINs from deactivation if taxpayers have used them on a federal tax return within the three preceding consecutive taxable years.

CORRECTIVE ACTION: The IRS agrees to implement programming changes to prevent ITINs from deactivation if taxpayers have used them on a federal tax return within the three preceding consecutive taxable years.

TAS RESPONSE: TAS appreciates the IRS’s commitment to fix this issue.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Adopted

OPEN or CLOSED: Open

DUE DATE FOR ACTION (if left open): 6/30/2026

IRS RESPONSE TO RECOMMENDATION: We are currently reviewing the potential for ITIN modernization efforts, including efforts to facilitate digital submission of Forms W-7, Application for IRS Individual Taxpayer Identification Number, for processing through the ITIN Real-Time System. Any improvements or changes made will be dependent on resource availability and funding.

CORRECTIVE ACTION: We are currently reviewing the potential for ITIN modernization efforts, including efforts to facilitate digital submission of Forms W-7, Application for IRS Individual Taxpayer Identification Number, for processing through the ITIN Real-Time System. Any improvements or changes made will be dependent on resource availability and funding.

TAS RESPONSE: Digitalizing the submission of applications and allowing for processing through the Real-Time System could be transformational for ITIN processing. Nonetheless, many applicants would still likely need to submit ITIN applications or supporting documentation on paper. Thus, it remains important for the IRS to also modernize the Real-Time System with respect to how the IRS uses it to process and track the paper applications and documents that the IRS receives.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Partially Adopted

OPEN or CLOSED: Open

DUE DATE FOR ACTION (if left open): 7/31/2026

IRS RESPONSE TO RECOMMENDATION: As a part of current process improvement, the IRS implemented a new document authentication process that allows for the return of authenticated original documents earlier in application processing. This improvement has already yielded positive results for the taxpayer and the IRS by mitigating the risk of incorrectly routing original identification documents and reducing the time required to retain the documents. The results include a reduction in ITIN mail containing original identification documents returned by the United States Postal Service as undeliverable. The IRS will continue to explore options for additional process improvements that allow us to build on past success. Any improvements or changes made will be dependent on resource availability and funding.

CORRECTIVE ACTION: As a part of current process improvement, the IRS implemented a new document authentication process that allows for the return of authenticated original documents earlier in application processing. This improvement has already yielded positive results for the taxpayer and the IRS by mitigating the risk of incorrectly routing original identification documents and reducing the time required to retain the documents. The results include a reduction in ITIN mail containing original identification documents returned by the United States Postal Service as undeliverable. The IRS will continue to explore options for additional process improvements that allow us to build on past success. Any improvements or changes made will be dependent on resource availability and funding.

TAS RESPONSE: Returning documents more quickly to taxpayers is a positive change and helps reduce the chance that any given document gets misplaced. Tracking documents would be another big step toward ensuring that no documents are permanently lost. Additionally, when documents do get misplaced, the IRS should develop a system to track its responses to missing document requests and the actions the IRS takes to address those requests. Such efforts could begin as simply as notating requests and follow-up actions and may not require significant additional resources or funding.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Not Adopted

OPEN or CLOSED: Closed

DUE DATE FOR ACTION (if left open): N/A

IRS RESPONSE TO RECOMMENDATION: The IRS has paused existing efforts to expand Certifying Acceptance Agent services and conduct other ITIN-related activities.

CORRECTIVE ACTION: N/A

TAS RESPONSE: Certifying Acceptance Agents (CAAs) are third parties who help taxpayers prepare ITIN applications, conduct the initial authentication of identification documents, and work with taxpayers and the IRS to resolve and correct any issues with applications. If not for the CAA program, the IRS would have to spend more resources and employee time resolving issues with taxpayer ITIN applications to make up for what CAAs now provide at essentially no cost to the government. Taxpayer advocacy groups have indicated that there has been greater demand for CAA services than services available. Thus, expanding CAA services should save the IRS resources, in addition to providing better outcomes for ITIN applicants.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Not Adopted

OPEN or CLOSED: Closed

DUE DATE FOR ACTION (if left open): N/A