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Saturday, September 29, 2012


Nonresidents of the U.S. are required to have a taxpayer identification number for most U.S. tax reporting purposes, including FIRPTA reporting on sales of U.S. real property interests. Since such persons do not have social security numbers, they have to apply to the IRS for an International Taxpayer Identification Number (“ITIN”) via a Form W-7 application.

The Form W-7 requires certain documentation to be attached. In the past, a U.S. notary could make a notarized copy of an applicant’s passport, and that would be sufficient. Since earlier this summer, however, applicants must submit original documentation or certified copies of their documentation certified by the issuing agency. The IRS may hold on to this documentation for up to 60 days. Would you want to mail in your passport and hope you get it back? And what if you needed to travel within 60 days?

Instead of submitting an original document, a certified copy from the issuing agency is usable. However, the time, cost, delay, and hassle of getting a certified copy of a passport will vary from country to country. Birth certificates may also be used.

More formal rules are promised for 2013, but there is no indication that there will be any easing of the above requirements. There are some exceptions to this reporting.

Even before these new rules, getting an ITIN has always been something of a pain. Now, it is more difficult than ever. While perhaps it may be easier for someone to defraud the IRS and obtain an ITIN on an invalid form of identification via a certified copy through a notary vs. a direct submission to the IRS, is this level of inconvenience really necessary? Does anyone at Treasury care anymore about inconvenience to taxpayers when writing rules? Anyone who has tried to read the FATCA rules already knows the answer to that.

IR News Release 2012-62

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