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US Tax identification numbers

A US Tax Identification Number or TIN is crucial for the tax offices as that is indeed their main source of determining what income, gain, withholding and/or refunds is linked to you. The other source would of course be the name but it is secondary. Both need to be correct however. There are two TINs. There is the Employer Identification Number or EIN which is for legal entities and there is the Individual Taxpayer Identification Number which is for individuals.

The Employer Identification Number is for legal entities such as corporations, foundations, partnerships and estates. We would need an excerpt of a chamber of commerce as well as a copy of the passport for the individual who will be signing on behalf of the entity. We will use this information to fill out the application form, SS4. This needs to be signed by the official and returned to us. We use this to apply by phone. Every entry will be transferred letter by letter and, as a confirmation, this will all be spelled back to us. This does mean however that the normal duration of this procedure would on average be a week.

The Individual Taxpayer Identification Number is a bit harder to come by. To be able to fill out the application form, W7, we need a copy of the passport. The application lastly needs “proof” for the reason to obtain the ITIN. Assuming this is because of the requirement to file a US tax return the proof is the initial tax return. Other reasons are usually linked to the tax treaty and have the opposite as a reason: not to have to file a US tax return. The proof would then be a letter from the entity that would make distributions on original letter head, naming you and the type of income you will be receiving.

The application for an ITIN consists out of three parts: the application form W7, an original copy of your certified passport and the initial return. The certification of the passport can only be done by the issuing agency. This would mean either city hall if you reside in the country of your citizenship. If you live abroad the certification has to be done by your embassy or the consulate. What it basically is, is a copy of your passport on which the civil servant signs off that he or she checked it, it was real and a copy was made on the spot. It will require a stamp which states this as well as a signature of the civil servant.

The complete application will be filed to the ITIN unit and they will assign a number. This takes about 6-8 weeks including international mail. The return will be forwarded to the appropriate tax office for further processing.

An EIN is valid until the corporation is dissolved. An ITIN is valid for 20 years after which it has to be renewed. The application for a renewal goes through the same procedure with two major exceptions: the ITIN is named on the W7 form and a tax return is not required as proof.

As all our services the application fee is including any correspondence in case the initial application requires additional information or is denied.