Status: Open
Expected Completion Date: TBD
Quarterly Update:
1st Quarter: During the first quarter, TAS worked with the IRS to identify problems and suggest changes to the Individual Taxpayer Identification Number (ITIN) process. TAS offered to collaborate with the ITIN unit to develop and implement procedures that allow all applicants to apply for an ITIN throughout the year by submitting proof of a filing requirement. Also, we offered to collaborate for the development of an online Form W-7. Unfortunately the IRS declined both offers. During the second quarter, we will continue to advocate for the development and implementation of procedures to avoid unnecessary delay during the peak filing season.
Also during the quarter, TAS investigated how many ITIN holders’ claimed tax benefits the IRS disallowed because it did not timely process their ITIN renewal application or tax return. Our analysis showed nearly 95,000 tax returns had been denied a tax credit due to an expired or missing ITIN. The most common adjustment for this population is the denial of the other dependent credit (ODC).
2nd Quarter: During the second quarter, TAS suggested the Individual Taxpayer Identification Number (ITIN) unit consider assigning ITINs based on current year earnings statements submitted prior to the start of the filing season. This change may reduce the burden on the taxpayer and IRS if the taxpayer is allowed to submit Form W-7, Application for Individual Taxpayer Identification Number, with earning statements. Also, it could balance the workload for the ITIN unit throughout the year and may avoid unnecessary delays.
During the third quarter, we plan to reach out to the ITIN policy manager and request invitations to their policy meetings and continue working with the IRS for updates on changing policy to allow an electronic signature on Form W-7.
3rd Quarter: During the third quarter, TAS continued working with the IRS to identify problems and suggest changes to Individual Taxpayer Identification Number (ITIN) processing to reduce delays negatively impacting taxpayers through several actions. We suggested the ITIN unit assign ITINs based on current year earnings statements submitted prior to the start of the filing season and worked with the IRS for updates on changing policy to allow an electronic signature on Form W-7. Also, the Acceptance Agent program has been in service for three months and thus far has not received any systemic issue alerts on the program.