New hurdles for non-US persons obtaining a taxpayer identification number
By Beate Erwin, Ruchelman P.L.L.C.
When claiming a refund of over- withheld tax, purchasing/selling real estate, or complying with US filing obligations, a non-US person is required to obtain an individual taxpayer identification number (ITIN).
Under IRS regulations, an original passport or an official copy prepared by the issuing agency must be filed with the ITIN application (Form W-7). Prior to 2017, where neither option was feasible, a US or foreign certified acceptance agent (CAA) could attest to the accuracy of the identification documents (usually passports).
A recent change to these rules significantly limits the options available to non-US ITIN applicants. Effective January 1, 2017, the rules relating to foreignbased CAAs have changed considerably: all agreements with CAAs located outside the US have been terminated.
While domestic CAA agreements are not affected, the language of the new rules suggests that CAAs can act only on behalf of US-resident applicants. ITIN applicants residing outside the US may only submit Form W-7 (i) by mail or (ii) in person to an employee of the IRS or a designee of the Treasury Department at a US diplomatic mission or consular post.
While it has been the practice for these diplomatic offices to offer document authentication and provide certified copies of documents to ITIN applicants, services vary from country to country. Further, it should be noted that all IRS employees authorised to review and accept applications are currently located in the USA.
Beate ErwinRuchelman P.L.L.C., New York, NY, USA
T: +1 212 755 3333
Ruchelman P.L.L.C. is a US international law firm providing cross-border tax planning and legal services to foreign corporations and non-US individuals.
Beate Erwin is a Member (Partner) in the firm’s New York headquarters, where she advises global corporate groups and high net worth individuals on cross-border business structures with a focus on investment in the USA and cross-border reorganisations. Her clients also include European artists and sportsmen and foreign non-profit organisations, whom she advises on US tax and reporting implications of US performances and activities.
Published: Spring 2017 l Photo: Colourbox.de