Gokce Tandogdu
ITIN Specialist, itin.net
The IRS does not publish an exact, real-time count of how many individuals hold an Individual Taxpayer Identification Number (ITIN). While a precise figure for "how many itin filers are there" is not publicly available, it is understood that millions of ITINs have been issued since their inception in 1996.
Understanding ITIN Issuance and Purpose
The Internal Revenue Service (IRS) issues ITINs to individuals who are required to have a U.S. taxpayer identification number but do not have, and are not eligible to obtain, a Social Security number (SSN). This typically includes certain non-resident aliens, resident aliens, dependents, and spouses of U.S. citizens and resident aliens.
ITINs are used solely for federal tax reporting purposes. They allow individuals to comply with U.S. tax laws, claim tax benefits, and meet other tax-related obligations. The primary forms for which an ITIN is necessary include filing federal income tax returns (such as Form 1040-NR for non-resident aliens), claiming tax treaty benefits, and sometimes for other financial transactions that require a U.S. taxpayer identification number, such as opening a U.S. bank account or forming a U.S. LLC.
Since the program's inception, the IRS has processed millions of applications for ITINs. While the IRS does not release a running total, the demand for ITINs reflects the significant number of foreign nationals and non-residents engaging with the U.S. economy or having U.S. tax obligations. The number of ITIN applications can fluctuate annually based on economic conditions, immigration patterns, and changes in tax law.
Who Needs an ITIN?
An ITIN is essential for anyone who needs to file a U.S. tax return or is required to have a U.S. taxpayer identification number for other tax purposes but cannot obtain an SSN. This category broadly includes:
- Non-resident aliens who are required to file a U.S. tax return or claim a tax treaty benefit. This could be due to earning U.S. source income or selling U.S. real property.
- Resident aliens (based on the substantial presence test or green card status) who are not eligible for an SSN. This is less common but can occur.
- Dependents and spouses of U.S. citizens or resident aliens who are not eligible for an SSN.
- Individuals claiming tax treaty benefits on U.S. income who are not U.S. residents and not eligible for an SSN.
Each year, the number of individuals falling into these categories and requiring an ITIN contributes to the overall ITIN filer population. The IRS uses ITINs to track tax filings and ensure compliance with U.S. tax laws for all individuals, regardless of their immigration status.
Applying for an ITIN: The Process
To obtain an ITIN, an individual must file Form W-7, Application for IRS Individual Taxpayer Identification Number. This application must be submitted along with original or certified copies of identification documents and a valid federal tax return (unless an exception applies).
There are several ways to submit the Form W-7:
- Mail: You can mail your application, supporting documents, and tax return directly to the IRS in Austin, Texas. Processing times can be lengthy, often taking 7 to 11 weeks or more, especially during peak tax seasons.
- IRS Taxpayer Assistance Centers (TACs): Some IRS TACs offer in-person application services. You must bring original or certified copies of your identification documents. Appointments are often required.
- Certified Acceptance Agents (CAAs): This is often the most convenient method. CAAs are individuals or entities authorized by the IRS to assist applicants in obtaining ITINs. A CAA can review your application, verify your original identification documents, and forward your application to the IRS. Using a Certified Acceptance Agent can expedite the process and eliminate the need to mail original documents. itin.net offers assistance through its network of CAAs.
Required Documentation for Form W-7
When applying for an ITIN, you must provide documentation to prove your identity and foreign status. The IRS requires original identification documents or certified copies from the issuing agency. Accepted documents typically include:
- Passport: This is the preferred document as it verifies both identity and nationality.
- National Identity Card: A card that includes name, photograph, address, date of birth, and expiration date.
- U.S. Driver's License
- Birth Certificate (for dependents under 18)
- Foreign Driver's License
- Foreign Military Identification Card
- Foreign Voter's Registration Card
- Visa
If you are applying through a Certified Acceptance Agent, they can verify these documents for you, and you will not need to mail your originals to the IRS. This is a significant advantage of using the CAA pathway.
Processing Times and What to Expect
Once the IRS receives your Form W-7 and supporting documentation, the processing can take several weeks. The IRS estimates processing times to be between 7 to 11 weeks, but this can vary significantly. During busy periods, such as the tax filing season (January to April), wait times can be longer. Expedited processing might be available in certain urgent circumstances, but it is not guaranteed.
Upon successful processing, the IRS will issue an ITIN and mail a notice, CP-565, to the applicant. This notice confirms the assigned ITIN. It is crucial to keep this notice and your ITIN safe, as you will need it for all future tax filings. If you are applying concurrently with a tax return, the tax return will be processed using the assigned ITIN. The IRS will send a notice, CP-48, if there are any issues with your tax return that need attention.
If you are forming a U.S. business, such as a U.S. LLC, you may also need an EIN (Employer Identification Number) from the IRS. You can apply for an EIN separately using Form SS-4. While an ITIN is for individuals, an EIN is for businesses. Having both can be essential for complex business operations, including opening a U.S. bank account.
ITIN Renewal and Expiration
ITINs do not expire unless they are not used on a federal tax return for three consecutive tax years. However, the IRS began a renewal program in 2016. If your ITIN has not been used for a tax filing in the last three years, or if it falls within a specific range designated by the IRS for renewal (e.g., ITINs issued before 2013 with middle digits 70-80), you may need to renew it. The renewal process is similar to the initial application, requiring a renewed Form W-7 and updated identification documents. The IRS typically sends out notices, such as CP-575, to inform taxpayers if their ITIN is set to expire or needs renewal. It's important to stay informed about IRS renewal notices to maintain an active ITIN.
Common Mistakes When Applying for an ITIN
Several common errors can cause delays or rejections of Form W-7 applications. Being aware of these can help ensure a smoother process:
- Incomplete Application: Missing information on the Form W-7 is a frequent issue. Ensure all required fields are filled out accurately.
- Incorrect or Missing Identification: Failing to provide valid, unexpired identification documents or not providing originals or certified copies can lead to rejection. If using a CAA, ensure they are properly certified.
- Missing Tax Return: Most applicants must submit a valid federal tax return with their Form W-7. Exceptions exist, such as for certain treaty benefits or specific IRS certifications, but these are not the norm.
- Incorrectly Certified Documents: If you are not using a CAA, ensure your certified copies are from the issuing agency. Self-certified copies are generally not accepted.
- Mismatched Information: Ensure the name and other personal details on your Form W-7 exactly match those on your identification documents and tax return.
Addressing these common mistakes can significantly improve the chances of your ITIN application being approved promptly.
Next Steps After Obtaining Your ITIN
Once you receive your ITIN, it becomes your permanent tax identification number for U.S. tax purposes. You will use this number on all future U.S. tax filings. If you are planning to conduct business in the U.S., you will likely need to obtain an EIN for your business entity, such as a U.S. LLC. This is a separate process from obtaining an ITIN. An EIN is required for most businesses to operate, hire employees, and open business bank accounts. You can learn more about forming a U.S. LLC and obtaining an EIN on our site. Many foreign nationals also find it beneficial to open a U.S. bank account, which may require both an ITIN and an EIN, depending on the bank and business structure.
Seeking Assistance with Your ITIN Application
While the IRS provides instructions for applying for an ITIN, the process can be complex, especially for those unfamiliar with U.S. tax procedures. The IRS offers assistance through its website and taxpayer advocate services. For a more streamlined and secure experience, consider using a Certified Acceptance Agent. These agents are trained to handle ITIN applications and can verify your identity documents, reducing the risk of errors and the need to mail sensitive originals. itin.net partners with CAAs to provide reliable ITIN application services. If you have complex tax situations or specific questions about your eligibility, consulting a qualified tax professional or an attorney specializing in international taxation is advisable. For general information on ITINs and related services, you can explore our Q&A section [/qa].