Gokce Tandogdu
ITIN Specialist, itin.net
An Individual Taxpayer Identification Number (ITIN) does not expire. However, the IRS deactivates ITINs that have not been used on a federal tax return for three consecutive tax years. If your ITIN has been deactivated, you will need to reapply for a new one. This process is similar to the initial application, requiring you to submit a Form W-7, Application for IRS Individual Taxpayer Identification Number, along with original or certified copies of your identification documents and a valid federal tax return. Understanding how long does ITIN last involves recognizing this deactivation rule and the steps to reactivate or reapply if necessary.
ITIN Deactivation and Renewal
The IRS deactivates ITINs that have not been reported on a U.S. federal income tax return for three consecutive tax years. This means if you obtained an ITIN in 2020 but did not file a tax return using it in 2020, 2021, or 2022, the IRS would likely deactivate your ITIN in 2023. This deactivation does not mean the number is permanently invalid; it simply means it is no longer active for tax processing until you reapply. The IRS sends a notice, such as CP-48, to inform you that your ITIN is scheduled for deactivation or has been deactivated. It is essential to respond to these notices promptly.
If your ITIN has been deactivated, you must submit a new Form W-7 application to the IRS. You cannot simply request that your old ITIN be reactivated. The application process for a new ITIN requires you to provide proof of your identity and foreign status. This typically includes an original or certified copy of your passport. Other acceptable identification documents may be used if a passport is not available, as detailed on the Form W-7 instructions. Crucially, you must also submit a valid federal tax return with your Form W-7 application. This tax return must be filed for the year you are applying for the ITIN. For example, if you are applying for a new ITIN in 2024, you will likely need to file a 2023 tax return along with your application. This requirement ensures that the ITIN is being issued for a legitimate tax purpose.
Why ITINs Are Deactivated
The primary reason for ITIN deactivation is inactivity. The IRS uses ITINs to track taxpayers who are required to file U.S. taxes but are not eligible for a Social Security Number (SSN). If an ITIN is not used for three consecutive filing periods, the IRS assumes the individual no longer has a U.S. tax filing requirement or has obtained an SSN. This deactivation process helps maintain the integrity and accuracy of the IRS taxpayer database. It also prevents the potential misuse of inactive ITINs. The IRS aims to ensure that its resources are allocated efficiently by deactivating numbers that are no longer in active use for tax compliance purposes.
Reapplying for a Deactivated ITIN
To reapply for a deactivated ITIN, you must complete a new Form W-7 application. You will need to include all the required supporting documentation, including proof of identity and foreign status, and a U.S. federal tax return. The application can be submitted directly to the IRS at the address listed in the Form W-7 instructions or through a Certified Acceptance Agent (CAA). Using a CAA can streamline the process, as they are trained by the IRS to assist with ITIN applications and can verify your original identification documents, eliminating the need to mail them to the IRS. Many individuals find the assistance of a CAA invaluable when reapplying. The itin.net service helps individuals connect with CAAs who can verify documentation and submit applications.
The processing time for a new Form W-7 application can vary. Generally, it takes the IRS 7 to 11 weeks to process an ITIN application submitted directly. If you apply through a CAA, the verification of your documents happens immediately, but the IRS still requires its standard processing time to issue the ITIN. It is important to file your tax return and Form W-7 well in advance of any tax deadlines to account for this processing time. Failure to do so could result in penalties if your tax return is filed late.
Exceptions to Deactivation
There are limited exceptions to the ITIN deactivation rule. The IRS generally deactivates ITINs that have not been used on a tax return for three consecutive years. However, if you have a specific reason for not filing a tax return for a few years but still require your ITIN, you may need to communicate with the IRS directly. This could include situations where you have a U.S. tax obligation that does not require annual filing, such as certain foreign income reporting requirements or specific treaty benefits. It is advisable to consult with a tax professional in such cases to ensure you remain compliant and your ITIN remains active if necessary.
For instance, if you are a non-resident alien who has income from U.S. sources but your income is below the filing threshold, you may not be required to file a U.S. tax return annually. However, if you wish to claim certain treaty benefits or obtain a refund of excess tax withholding, you may choose to file a tax return. If you do not file for three consecutive years, your ITIN will be deactivated. If you later decide to file a tax return to claim a refund or treaty benefit, you will need to reapply for a new ITIN. The question of how long does ITIN last is therefore closely tied to your ongoing U.S. tax filing obligations.
Understanding Your ITIN Status
It is your responsibility to keep track of your ITIN and ensure it remains active if you anticipate any future U.S. tax obligations. You can check the status of your ITIN by contacting the IRS directly or by using the services of a Certified Acceptance Agent. If you receive a notice from the IRS indicating that your ITIN is scheduled for deactivation, take immediate action. This might involve filing a tax return for the relevant year or submitting a new Form W-7 application if you no longer have a valid ITIN. Proactive communication with the IRS or a tax professional can prevent complications.
If you are planning to conduct business in the U.S., such as forming a U.S. LLC or opening a U.S. bank account, you may need an active ITIN. For example, if you are forming a U.S. LLC, you might be required to file Form 5472 to report transactions with a foreign owner, which necessitates an ITIN or SSN. Similarly, opening certain types of U.S. bank accounts for non-residents might require an ITIN. Ensuring your ITIN is active avoids delays in these business and financial activities. The IRS provides information on its website about ITINs, including how to check their status and renewal procedures.
The Application Process: Direct vs. CAA
When applying for an ITIN, whether for the first time or to replace a deactivated one, you have two primary submission options: directly to the IRS or through a Certified Acceptance Agent (CAA). Applying directly to the IRS involves mailing your original identification documents and your completed Form W-7 with a tax return to the IRS ITIN Operation. The risk with this method is that your original documents will be mailed back to you, which can take several weeks, and there is a possibility of them being lost in transit. The processing time at the IRS can also be lengthy, typically 7–11 weeks for initial applications.
Alternatively, you can use a CAA. CAAs are individuals or entities authorized by the IRS to assist taxpayers in applying for ITINs. When you apply through a CAA, they will review your Form W-7, verify your original identification documents (like your passport), and then forward the application package to the IRS. The advantage of using a CAA is that they can certify your documents, meaning you do not have to mail your originals to the IRS. This significantly reduces the risk of losing your important identification. The itin.net service can help you find a qualified CAA to assist with your application.
While the CAA handles the verification and submission, the IRS still performs the final review and processing of the application. The IRS's standard processing times apply regardless of whether you use a CAA or apply directly. However, the immediate verification by a CAA often leads to a smoother and more secure application experience for the applicant. This is particularly beneficial for non-residents who may not be able to easily replace lost identification documents.
What to Expect After Applying
Once the IRS processes your Form W-7 application, they will issue you an ITIN. You will receive a notice, typically CP-565, from the IRS confirming your ITIN. This notice is crucial and should be kept in a safe place along with your other important tax documents. If you applied with a tax return, you will also receive the processed tax return and any refund due, or notification of any balance owed. The IRS may also send notices related to your tax return, such as CP-400 or CP-2000, if they identify discrepancies between your return and their records.
After receiving your ITIN, you can use it for all future U.S. tax filing purposes. Remember the rule about inactivity: if you do not use your ITIN on a federal tax return for three consecutive years, it will be deactivated. Therefore, if you have ongoing U.S. tax obligations or plan to have them, ensure you file a tax return annually using your ITIN. This is the most straightforward way to keep your ITIN active and avoid the need for reapplying. For those who need an ITIN for reasons other than immediate tax filing, such as to obtain an EIN for a business, it is important to understand the implications for ITIN longevity and to plan accordingly.
Common Reasons for ITIN Application Rejection
Several factors can lead to the rejection of a Form W-7 application. Incomplete applications are a common cause; ensure all sections of the form are filled out accurately and legibly. Missing or unverified identification documents are another frequent issue. The IRS requires either original identification documents or certified copies from the issuing agency. CAAs can certify documents, but if you are mailing originals, ensure they are indeed original documents. Failure to attach a valid federal tax return to the Form W-7 is a primary reason for rejection. The tax return must be timely filed and relevant to the year for which the ITIN is being sought.
Incorrect taxpayer information, such as name or date of birth mismatches with your identification documents, can also lead to rejection. It is vital that the information on the Form W-7 perfectly aligns with your supporting documents. Additionally, if you are applying for an ITIN based on a tax treaty benefit and do not provide the required documentation or justification, your application may be denied. Reviewing the Form W-7 instructions thoroughly before submitting your application is the best way to avoid these common pitfalls. If your application is rejected, you will receive a notice from the IRS explaining the reason, and you will need to correct the issues and resubmit the application.