Main Reasons for an ITIN Application Rejection

Securing an Individual Taxpayer Identification Number (ITIN) is often essential for non-U.S. residents involved in tax-related matters in the U.S. However, the process can sometimes meet with rejection due to various reasons. This article aims to explain the four most common reasons why an ITIN application might be rejected by the Internal Revenue Service (IRS), with a view to help avoid common pitfalls.

Understanding the ITIN Application Process

At first glance, applying for an ITIN appears very simple. The required form, the W-7, is only a single page and does not request anything complex. However, there’s a reason why the form’s instruction document is 14 pages long. As the saying goes, the devil is in the details!

The Importance of Supporting Identification Documents in ITIN Applications

The primary reason for application denial, and by far the most frequent one, involves the supporting identification documents that need to be attached.

Using the Right Certification Method for Passport Copies in ITIN Applications

The simplest method, for those who possess it, is to provide a certified copy of their passport. However, care must be taken to understand what a certified copy means in the eyes of the IRS. A photocopy made by the individual is not a certified copy, nor is a copy provided by a Commissioner of Oaths or a notarized copy. In reality, there are only two options: either a copy authenticated by the main issuer of the document or a copy by an IRS certification agent. For a Canadian passport, the main issuer is Canada. Alternatively, there are trained individuals who are part of the IRS’s Certifying Acceptance Agent program, who possess this authority and can thus facilitate the process.

Alternatives for Passport in ITIN Applications

If there is no passport, it’s possible to use a combination of a birth certificate and a national identity document with a photo. However, once again, certified copies by the main issuer are necessary. Therefore, unless one is prepared to send the original documents to the IRS, the only viable option is to use the services of a Certifying Acceptance Agent.

Aligning the ITIN Application with U.S. Tax Report Filing

Reason number two involves the failure to attach a tax report to the ITIN application. The primary reason to obtain an ITIN is the need to file a U.S. tax report and thus requiring an identification number. Many individuals are correctly advised that they will need an ITIN to file their U.S. taxes. These well-intentioned individuals then attempt to secure an ITIN in anticipation of filing a tax report. However, this isn’t how the process works. The ITIN application must coincide with the filing of the tax report, not precede it. Consequently, for most reasons used to apply for an ITIN, a 1040 or 1040NR form should be attached.

The Role of Exceptions in ITIN Applications

Reason number three arises when an applicant doesn’t use or list the correct reason, or what’s referred to as an exception, for requesting an ITIN. It is indeed possible to obtain an ITIN without a tax report by checking box h on the form. However, one then has to choose an applicable exception from a very limited and IRS-defined list. Each exception requires specific supporting documents and one must strictly follow IRS instructions on this matter. Attempting to list an exception that is not on the IRS-approved list will invariably result in automatic rejection.

Adhering to the Proper ITIN Application Delivery Method

The final reason, although certainly not the least important given it’s the easiest to avoid, involves the application delivery method. An original paper application with a pen signature must always be sent to the IRS. Any application sent as a photocopy of a signed form will be rejected. Electronic signatures are also out of the question. The IRS is still operating with traditional methods and has yet to adapt to newer technology.

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