You can help your ITIN clients who need to file tax returns or secure ITINs to file by reviewing information about recent program changes at www.irs.gov, keyword: ITIN.
Filing with an ITIN:
The IRS issues ITINs for Federal tax purposes, and ITINs should be used for tax reporting only.
ITINs do not authorize a person to work in the U.S. or provide eligibility for Social Security benefits.
Tax returns filed with an Individual Taxpayer Identification Number reporting wages paid are required to show the Social Security Number under which the wages were earned. This creates an identification number (ITIN/SSN) mismatch. In the past, returns with this mismatch could only be filed on paper. Due to programming changes, the IRS' e-file system can now accept these returns.
The taxpayer's correct ITIN should be used as the identifying number at the top of Form 1040. When inputting W-2 information, the SSN should be entered exactly as shown on the Form W-2 issued by the employer. It is now possible to e-file a return with an ITIN/SSN mismatch.
Seeking an ITIN:
ITIN applicants must show a Federal tax purpose for seeking ITINs. Most will demonstrate a tax purpose by attaching an original federal tax return to Form W-7, Application for Individual Taxpayer Identification Number (revised Dec. 17, 2003), and mailing, with their proof of identity documents, to the IRS address listed in the Form W-7 instructions.
In cases where a current-year tax return has already been filed that excluded a spouse or dependent who needs an ITIN, the taxpayer should complete Form 1040X, Amended U.S. Individual Income Tax Return, showing the ITIN applicant's information, and then attach it to Form W-7.
Local IRS Taxpayer Assistance Centers (TACs) provide limited "e-file only" courtesy tax return preparation and filing. generally for individuals whose incomes are $35,000 or less. Individuals seeking ITINs may bring prepared federal tax returns to a TAC for assistance in completing Form W-7 and applying for an ITIN.
Many volunteer groups who assist low-income taxpayers with tax return preparation will prepare paper tax returns for ITIN taxpayers. Call the IRS at (800) 829-1040 for the closest site, such as a VITA site (Volunteer Income Tax Assistance).
This information is good for all years of UltimateTax.