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Sunday, March 21, 2010

Success - New ITINs!

Individual Taxpayer Identification Numbers are used by those of us that do not qualify for US Social Security Numbers, so that we can file taxes in the US. Unfortunately the process to get one more difficult than, for example, getting an EIN for a partnership which can be requested by phone.

To get an ITIN you file a W-7 form. In order to qualify for an ITIN you need to meet one or more of the criteria on the form. And specifically there are a small subset of those criteria (that probably don't apply) for which you can apply in a standalone manner. It appears that most need to apply for a W-7 at the time when you first submit a tax return. Interesting, because the tax return that you are filing at that point wants an ITIN included on the form. Chicken or egg?

Anyway, the way this works is that you fill out the W-7 (with attached documentation), attach it to your 1040NR (or whatever your first return is that requires the ITIN), and you mail the 1040NR to the location that processes W-7s instead of the location that processes the 1040NR (or whatever form). The W-7 processors assign an ITIN, probably write it on the return, then forward the return to the processors for that form.

This all seems odd, because for example in our case we are submitting:
- 1065 (Federal return for the partnership)
- 165 (State return for the partnership)
- 1040NRs (federal - individual)
- 140NRs (state - individual)
All of them are asking for an ITIN, and only the 1040NRs are sent with the W-7 application. For the rest we just input "Appld For" in the space where the ITIN was supposed to go.

There are at least two ways to mess this up if not careful.
1) Do the W-7 incorrectly
2) Follow the submission instructions for the return instead of sending it to the W-7 people.

A quick Google search will provide a long list of horror stories about (1) messing up the W-7 submission. To help with this the IRS has authorized Taxpayer Assistance Centers (TACs) to help you apply correctly. I phoned a local TAC (yes there are some in Canada) who agreed that there is a very high percentage of rejections and therefore it is a very good idea to get help; but then went on to say that it would be $600 to get that assistance.

I don't think so.

More Googling, looking at the criteria, following the bread crumb trails. It appears that the likely place to fail is submitting a copy of your passport that is not properly notarized. The IRS requires that copies be notarized by a US notary. I.e. A Canadian Notary probably won't cut it. It seems that authorities from countries that signed the Hague Convention can do the verification and provide something called an "apostille", but it seems that Canada is not on the list. Probably this is the source of many rejections.

When we first looked at the ITIN story, we determined that we did not qualify for applying at that time and would have to do the application many months later when submitting the first return. So we just photocopied our passports (the main picture page) and had the copies notarized in the US on our next visit there. That seemed to work: our W-7s were accepted and ITINs came in the mail.


  1. The latest rules from the IRS are send in the passport. Even a Canadian Government certified copy doesn't seem to work. You can go to a TAC Taxpayer assistance center and they can do it. Why the IRS can't just contact Revenue Canada is beyond me but then we are talking governments. Those people that take and take.
    I am on my third try. US CGA/Notary certified Canadian Gov Certified. I guess a trip to Spokane in the middle of the winter is my next option. That or send in my passport for a miniumum of 3 months. How do these people get such an overwhelming level of power and impunity.

  2. Hi... We too have struggled to get ITIN's... two failed attempts with copies notarized by US notaries. However, last attempt, we did go to the Calgary Passport office, and request a (free!) certified copy of our passports (takes about a week), which we submitted again with our W-7 and 1040NR forms, and 8-10 weeks later received our ITIN's in the mail. Got them in mid-December 2012, so I think this is the IRS's current position for acceptable documentation.

  3. Can you recommend someone to prepare my taxes. I purchased a house in Phoenix 2y ago and haven't file a tax return since because of trouble obtaining ITIN.

    1. I am sorry. I cannot recommend anyone to do your taxes. I have been doing ours myself, so I have not tried any service providers. I was able to get our ITINs as described here on the blog...but I acknowledge that the two comments above are more current. It would be great if others chime in here with experiences on getting ITINs.

    2. Thanks for fast reply. Got lucky and found accountant that is preparing taxes for Canadians with ITIN and US rental properties.

  4. Found accountant as well. The cost is huge (I have only one property)1050$ for two returns + 2 ITINs

    1. Ouch. Does that include an LLP 1065 return for the property? Or do you hold the property in your own names and the two returns are individual 1040NRs? If a 1065 is involved it does complicate taxes.

  5. my accountant in Phoenix charges $400/person up to 3 properties. Includes state tax. This is not for LLP. Weech Financial. They will likely give you a discount for your first year.