Individual Taxpayer Identification Number

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The ITIN is the most significant source of revenue for the US government, as per Statista. The internal revenue service uses it. US residents, regardless of their immigration status, should have a registered individual taxpayer identification number. The ITIN can be issued by the social security administration or the internal revenue service. 

What Is the Need for An Individual Taxpayer Identification Number

One of the primary purposes of the ITIN is to bring the undocumented individuals that do not possess or qualify for a social security number get under the tax radar. Getting the undocumented individuals under the taxing system brings the US Federal Government Billions of dollars in income tax revenue. There are categories of people that can apply for and receive ITIN. These people include the following:

  • A foreign national business or trade in the US earns money from the US but lives in another country. 
  • People that come to the US as spouses or dependent people of lawful US residents. 
  • A foreign non-resident can be a researcher, student, or professor in the US. 
  • Spouses or dependents of foreign nationals on temporary visas. 
  • Individuals without possession or eligibility for social security numbers. 
  • Individuals with a requirement to show an ITIN or file a tax return. 

Subsequently, individuals eligible for social security numbers should not apply for an individual taxpayer identification number. However, individuals who haven’t filed tax returns for the past three years may need a new unique taxpayer identification number.

 As the federal government policy, ITINs expire automatically if they haven’t been used for three consecutive years. Subsequently, the Individual taxpayer identification number registered before 2013 with the middle digits “70” through “87” will also expire. 

How To Apply for An Individual Taxpayer Identification Number?

The IRS website is helpful and the right place to gather information about the registration of ITIN. It is a necessity to complete and submit the form W-7 to obtain an individual taxpayer identification number. People can mail all the relevant documentation along with the form to the offices. Subsequently, people applying for ITIN can also go to walk-in IRS offices or get their registration done through an acceptance agent. However, the acceptance agent must be authorized by the IRS. Individuals obtaining an ITIN should also know that they can’t claim earned income credit through the ITIN. 

Benefits Of Obtaining an Individual Taxpayer Identification Number

Becoming a tax return filer is in compliance with the law in the US. Additionally, a few more benefits can be obtained by getting an individual taxpayer identification number. 

  • Eligible To Open an Interest-Bearing Account

People bearing an ITIN are eligible for opening an interest-bearing account in the United States. 

  • Driving License

This doesn’t apply to all the states in the United States. However, 12 states, including the district of Colombia, allow undocumented immigrants to get a driving license if they have an individual taxpayer identification number. It is highly recommended to check within the states and get updated knowledge of the requirements for a driving license. 

  • Valid For Future Residency Plans

An individual taxpayer identification number is solid proof of the number of years an individual has spent in the United States. This documentation can be helpful when applying for legal residency in the United States in the future. An ITIN will show that you have demonstrated compliance to the law and have legally paid taxes while staying in the US. 

Some Misconceptions About The ITIN

Undocumented individuals applying for the ITIN shouldn’t worry about forceful evacuation. The IRS has a strict rule regarding the safety and protection of its data. Hence, no data goes to the immigration department. 

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