IRS imposing new restrictions on ITIN’s

The Internal Revenue Service (IRS) has issued new regulations that would make it harder for people to obtain an Individual Taxpayer Identification Number (ITIN) and will restrict its use to tax filing and reporting purposes only.

ITIN is a nine-digit, tax processing number issued by the IRS to individuals who are unable to obtain a Social Security Number, but must file tax returns. Many people, who don’t have legal authorization to work, try to use the ITIN in lieu of an SS#, to apply for a job. However, an ITIN does not authorize a person to work, and, legally, cannot be used for a job, in place of an SS#.

The SSA imposed strict requirements to obtain SS#’s years ago, and since then, illegal immigrants have turned to ITINs for purposes other than for tax filing, such as to find employment, to open a bank account, to purchase property, or to be used as an identification card. The IRS said it has issued 7 million ITINs since 1996, but only about one-fourth of this number actually used the number to file income tax returns.

In the past, ITINs were issued regardless of a person’s immigration status. The IRS has now made it clear that the ITIN is intended only for filing tax returns, and does not authorize a person to work in the United States, nor does it provide eligibility for Social Security benefits or the Earned Income Tax Credit. The IRS added that ITIN is not a valid identification outside of the US tax system.

To ensure that the ITINs are used only for tax filing and reporting purposes, the IRS issued the following changes, effective as of December 17, 2003:

• All new ITIN applicants will have to show a federal tax purpose for seeking an ITIN. For those seeking an ITIN for their income tax obligations, this will require attaching a tax return to the new Form W-7 when they are ready to file their income tax return.

• ITIN applications, without proof of need for tax purposes, will be rejected.

• The IRS will reduce from 40 to 13 the number of acceptable documents as proof of identity to obtain an ITIN.

• The IRS will no longer issue ITIN cards, but will instead issue an authorization letter, containing the new ITIN, to avoid any possible similarity with a Social Security card, or attempts by illegal aliens to use an ITIN card like it was a Social Security card.

Per IRS’ ITINs have been misused and abused by many illegal immigrants. Many of them thought that by obtaining an ITIN, they could work, obtain driver’s license, and do other things that only legal immigrants are allowed to do. After September 11, 2001 many agencies have tighten their rules, to ensure that only those who are legally living in the US may obtain benefits.

Obviously, the government is very serious about enforcing immigration laws. It is now more difficult to be illegal in the U.S. That’s why I advise people to legalize their status now. There is no "shortcut" or "quick fix" to achieving the American Dream. The only way is through the legal way. Instead of relying on quick fixes and other "shortcuts", you should seek the advice of a reputable attorney, who can analyze your situation and options, and help you find the best and legitimate way to obtain legal status.

* * *

WEBSITE: www.gurfinkel.com

Four offices to serve you:

LOS ANGELES: 219 North Brand Boulevard, Glendale, California, 91203 • Telephone: (818) 543-5800

SAN FRANCISCO: 601 Gateway Boulevard, Suite 460, South San Francisco, CA 94080 • Telephone: (650) 827-7888

NEW YORK: 60 East 42nd Street, Suite 2101, New York, NY 10165 • Telephone: (212) 808-0300

PHILIPPINES: Heart Tower, Unit 701, 108 Valero Street, Salcedo Village, Makati, Philippines 1227

Telephone: 894-0258 or 894-0239