IR-2003-140 -- IRS ANNOUNCES REVISIONS TO ITIN

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This is important.  I must have sent a dozen people to Bellingham in the last two weeks for ITINs - Individual Taxpayer Identification Numbers.
This is the time of year when those who bought a rental condominium in Hawaii or Palm Springs or Scotsdale have to get their numbers to file their 2003 returns - or - heaven forbid, catch up on old returns to avoid penalties that can exceed $10,000 for non-residents failing to file a return when they have rental incoem in the USA.
It is a big change in policy.
david ingram
----- Original Message ----- 
From: IRS-NEWSWIRE 
To: IRS News Release Service 
Sent: Wednesday, December 17, 2003 11:08 AM
Subject: IR-2003-140 -- IRS ANNOUNCES REVISIONS TO ITIN APPLICATIONS
IR-2003-140, Dec. 17, 2003
IRS ANNOUNCES REVISIONS TO ITIN APPLICATIONS
WASHINGTON  The Internal Revenue Service today announced several steps to
strengthen controls over the issuance of Individual Taxpayer
Identification Numbers. The changes will help ensure that ITINs are issued
for their intended tax administration purpose for administering the tax
code and not for other reasons, such as providing personal identification.
In addition, the IRS is taking steps to help ensure that applicants can
continue to obtain ITINs without undue burden.
Beginning today, new ITIN applicants must use a revised Form W-7,
Individual Taxpayer Identification Number Application. ITIN applicants
also must provide proof that the ITIN will be used for tax administration
purposes. For applicants seeking an ITIN in order to file a tax return,
the return must be filed along with the W-7.
About one-quarter of the ITINs issued for tax return purposes never
actually find their way onto a tax return, said IRS Commissioner Mark W.
Everson. The steps taken today ensure ITINs will be issued only to those
seeking to comply with their tax obligations.
Federal law requires individuals with U.S. income, regardless of
immigration status, to pay U.S. taxes. The ITIN, a nine-digit number that
begins with the number 9, was created for use on tax returns for those
taxpayers who do not qualify for a Social Security Number. The IRS has
issued 7 million ITINs since 1996.
However, some ITINs issued by the IRS do not appear in tax filings or tax
reporting documents and may have been procured solely to serve as a form
of identification. Earlier this year, the IRS issued letters to all
governors and state motor vehicle departments advising that ITINs were not
designed to serve as personal identification and would not be suitable for
determining identification of applicants for drivers licenses.
After a review of the ITIN program, the IRS will implement these changes
effective immediately:
 All new ITIN applicants will have to show a federal tax purpose for
seeking the ITIN. For those seeking an ITIN to meet their income tax
filing obligations, this will require attaching a federal tax return to
the Form W-7 when they are ready to file their tax return with the IRS.
 ITIN applications without proof of need for tax administration purposes
will be rejected.
 The IRS will reduce to 13 from 40 the number of documents it will accept
as proof of identity to obtain an ITIN. The 13 acceptable documents are
listed in the new Form W-7 instructions.
 The IRS also will change the appearance of the ITIN from a card to an
authorization letter to avoid any possible similarities with a Social
Security Number card.
A small number of non-U.S. residents apply for an ITIN to report income
under a tax treaty, and a small number of U.S. resident and non-resident
applicants apply for an ITIN to report income from a U.S. bank or
brokerage account. Neither type of applicant will be required to file a
tax return along with their ITIN application. Non-resident applicants will
be required to furnish evidence of their ownership of the asset that gave
rise to the reporting obligation. Resident applicants will be required to
furnish evidence of actual rather than intended ownership of the bank or
brokerage account.
The IRS will continue to help individuals who seek ITINs comply with the
tax laws. The IRS has found no indication of any differences in accuracy
rates between tax returns filed with ITINs and tax returns filed with
SSNs. The agency understands the need to continue to monitor challenges
posed by ITINs, and will do so over the course of time.
The IRS will continue to review ways to improve Form W-7 and will conduct
a public comment period until June 15, 2004. The IRS will be publishing an
announcement in the Internal Revenue Bulletin that will ask for comments
on the revised form and the application process. Internal Revenue Bulletin
2004-2, to be published on Jan. 12, 2004, will give instructions on when
and how comments may be submitted.
Additional information is available at IRS.gov where English and Spanish
versions of the Form W-7 are available. A list of frequently asked
questions (FAQs) also is available.
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David Ingram's US/Canada Services
US / Canada / Mexico tax and working Visa Specialists
US / Canada Real Estate Specialists
4466 Prospect Road
North Vancouver,  BC, CANADA, V7N 3L7
Calls accepted from 10 AM to 10 PM 7 days a week
Res (604) 980-3578 Cell (604) 657-8451
(604) 980-0321 
[email protected]
www.centa.com www.david-ingram.com
Disclaimer:  This question has been answered without detailed information or consultation and is to be regarded only as general comment.   Nothing in this message is or should be construed as advice in any particular circumstances. No contract exists between the reader & the author and any and all non-contractual duties are expressly denied. All readers should obtain formal advice from a competent financial, or real estate planner or advisor & appropriately qualified legal practitioner, tax or immigration specialist in connection with personal or business affairs such as at www.centa.com. If you forward this message, this disclaimer must be included."
This from "ask an income tax and immigration and bankruptcy expert" from www.centa.com or www.jurock.com or www.featureweb.com. Canadian David Ingram deals daily with tax returns dealing with expatriate:
multi jurisdictional cross and trans border expatriate problems  for the United States, Canada, Mexico, Great Britain, the United Kingdom, Kuwait, Dubai, Saudi Arabia, South Africa,  Thailand, Indonesia, Egypt, Antarctica,  Japan, China, New Zealand, France, Germany, Spain, Italy, Russia, Georgia, Brazil, Peru, Ecuador, Bolivia, Scotland, Ireland, Hawaii, Florida, Montana, Morocco, Israel, Iraq, Iran, India, Pakistan, Afghanistan, Mali, Bangkok, Greenland, Iceland, Cuba, Bahamas, Bermuda, Barbados, St Vincent, Grenada,, Virgin Islands, US, UK, GB, American and Canadian and Mexican and any of the 43 states with state tax returns, etc.
  Alaska,  Alabama,  Arkansas,  Arizona,  California,  Colorado, Connecticut,  Delaware, District of Columbia,  Florida,  Georgia,  Hawaii,  Idaho,  Illinois,  Indiana,  Iowa,  Kansas,  Kentucky,  Louisiana,  Maine,  Maryland,  Massachusetts, Michigan, Minnesota,  Mississippi,  Missouri,  Montana,  Nebraska,  Nevada, New Hampshire,  New Jersey, New Mexico,New York, North Carolina,  North Dakota,  Ohio,  Oklahoma,  Oregon. Pennsylvania,  Rhode Island,  South Carolina,  South Dakota, Tennessee,  Texas,  Utah, Vermont,  Virginia, West Virginia, Wisconsin, Wyoming, British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec City, New Brunswick, Prince Edward Island, Nova Scotia, Newfoundland, Yukon and Northwest and Nunavit Territories,  Mount Vernon, Eumenclaw, Coos Bay and Dallas  Taxman and Tax Guru 
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