On June 30, 2014, the U.S. IRS announced that Individual Taxpayer Identification Numbers (ITINs) will expire if not used on a federal income tax return for more than five years. As a result, any ITIN issued since January 1, 2013, will remain in effect if used annually to file U.S. federal returns.
On June 30, 2014, the U.S. Internal Revenue Service (IRS) announced that Individual Taxpayer Identification Numbers (ITINs) will expire if not used on a federal income tax return for five consecutive years.1 Prior to this policy change, ITINs issued after January 1, 2013, would have automatically expired after five years even if used properly and regularly by taxpayers.2 The new policy, which applies to any ITIN regardless of when issued, ensures that anyone who uses an ITIN for tax purposes can continue to do so. The IRS will begin deactivating ITINs in 2016.
The new policy replaces the existing one that went into effect on January 1, 2013. Under the old policy, ITINs issued after January 1, 2013, would have automatically expired after five years, even if used properly and regularly by taxpayers. As a result of the announced change, any ITIN, including ITINs issued after January 1, 2013, will remain in effect provided a taxpayer continues to file U.S. tax returns. These taxpayers no longer face mandatory expiration of their ITINs and the need to reapply starting in 2018, which was the case under the old policy.
In the announcement the IRS noted that only about a quarter of the ITINs issued since the ITIN program began are being used on tax returns. The new policy will ensure that anyone who legitimately uses an ITIN for tax purposes can continue to do so, while at the same time resulting in the likely eventual expiration of millions of unused ITINs.
1 IRS Newswire, IR 2014-76.
2 For prior stories on ITINs, see the following issues of Flash International Executive Alert: 2013-120 (August 30, 2013) and 2012-215 (November 30, 2012). See the 2013 IES video on ITINs.
The information contained in this newsletter was submitted by KPMG LLP’s Washington National Tax practice.
ANY TAX ADVICE IN THIS COMMUNICATION IS NOT INTENDED OR WRITTEN BY KPMG TO BE USED, AND CANNOT BE USED, BY A CLIENT OR ANY OTHER PERSON OR ENTITY FOR THE PURPOSE OF (i) AVOIDING PENALTIES THAT MAY BE IMPOSED ON ANY TAXPAYER OR (ii) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY MATTERS ADDRESSED HEREIN.
© 2018 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.KPMG International Cooperative (“KPMG International”) is a Swiss entity.
Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.
Flash Alert is an Global Mobility Services publication of KPMG LLPs Washington National Tax practice. The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.