Steve_

Bit late in the day but I just noticed this: http://www.irs.gov/pub/irs-pdf/iw7.pdf

I assume this is an anti-fraud measure to stop people faking SSN cards with the ITIN on them. Says "reapply for a number", not, to keep the number active.

Vital steps!

So what about pre-existing numbers?

So not that vital then.

JAJ

Except that all ITINs begin with 9 and an SSN can never begin with 9.
http://www.irs.gov/Individuals/General-ITIN-Information
http://www.socialsecurity.gov/employ...omization.html


It looks like the rule only applies to new ITINs issued on or after 1.1.2013.
http://www.irs.gov/uac/Newsroom/IRS-...-Filing-Season


Canada did something similar when it put an expiry date on Social Insurance Numbers issued to temporary residents.

Steve_

Yeah but we're talking about fraud here. We assume the employer is either too dense to know or is turning a blind eye to it, i.e. plausible deniability.

Mmm, but this is a taxpayer ID. Good question actually, I wonder what number range they use in Canada. I very dimly recall reading that ITNs only have eight numbers to identify them, can't find a reference. That's more obvious than starting them with "9" because if you fake the card it still has the right number of numbers on it.

So what other reason could there be for making them expire after 5 years? Because for example if you're on H-4 you could be in the US longer than that.

Jscl

ITINs have nine numbers, same as SSNs but do always start with a 9. They are provided to legal people who cannot work but need a number for tax purposes, and to illegal people who file a tax return (which many do) or who go on someone else's tax return.

Although they're not legal for employment I expect there's a market for them for people who want to claim extra (fake) exemptions/credits on their tax return.

Steve_

ITNs, not ITINs is what I was referring to. ITN is the Canadian version of an ITIN. This is the question though, if they're supplied to people unlawfully present, then why make them subject to renewal? They must come up as being an ITIN when you run them through the SSN verification system when payroll is done.

There must be an explanation in the Federal Register somewhere.

Vague. How does it help ensure that?

All I can think of is that you could have a small business where they don't run the payroll through the SSN verification system, so someone shows up with a fake SSN with an ITIN on it. Or it's just basic fraud by the employer. Say the person is self-employed and using an ITIN.

Because the number changes, if the payroll is still done with an expired ITIN, the IRS become aware of it. And the employer has no defence because if the number changes they should know about it.

Wonder if they'll have expiry dates for SSNs at some point.

Jscl

Usually most illegals who have ITINs use SSNs to work, they either buy them at fleamarkets or somewhere like that, or we've even had them say their employer gave them an SSN. So when they employer does payroll the SSN "works" but when the employee does their taxes they use the SSNs figures on their own ITIN return. The IRS is fully complicit in this and actually there's a proper mechanism for illegals to pay taxes gained from SSNs that weren't their own. They just want the taxes!

But as I mentioned before, the trade of (once) valid ITINs might be prevalent because anyone can create a (fake) dependent if they can get an ITIN for them. Child tax credit would give them $1000 for that fake person, Earned Income Credit could give them a good few $100s more (in that case the taxpayer has to have an SSN, but the dependents can have ITINs).

Steve_

Child tax credit is for US persons only, has to be an SSN.

Here's an article about it: https://www.1040.com/federal-taxes/c...income-credit/

Jscl

Ok yep, that one's an SSN one, but there are other credits too, not to mention the extra exemption. And the earned income credit I said about can give a lot of money. I just can't see a better use for fake ITINs than for fake dependents on tax returns to get a bigger refund. But I'm not a criminal, and maybe criminals can think of better reasons.

durham_lad

I agree. Every year the IRS collects millions of $ in payroll taxes that are not credited to anyone's Social Security or Medicare.

JAJ

As far as I am aware, a Canadian ITN begins with "09" followed by seven digits. A temporary SIN begins with 9, then eight digits. A SIN beginning with 1-7 inclusive is assigned to a Canadian citizen or permanent resident, with the initial digit normally depending on where in Canada the number was first issued.

Effectively, an ITN looks like a SIN beginning with zero.

The temporary SIN expires whenever the holder's work permit expires. If the permission is renewed, the SIN will be reissued. Always the same number unless the holder becomes a Canadian citizen or permanent resident, in which case a new (permanent) SIN may be applied for.

An expired temporary SIN is not acceptable to work in Canada, but from the CRA forms, it looks like a person with an expired temporary SIN could still use it to file a tax return and not need an ITN.

maggster

ITIN's start with a 9 and have a 7 or 8 as the 4th digit.

EITC (Earned Income Tax Credit) cannot be claimed with an ITIN. Dependents who have an ITIN do not qualify the Taxpayer for the EITC

Steve_

Well even if you're legally present they do that. Because say you're in a non-immigrant category work authorized category, well you pay Medicare tax but you can't retire in the US so you never claim it. There are some limited exemptions for students and teachers but not for people who are say, on L-1 or H-1B, etc. I think people on E-2 are the ones who get screwed over the most.

Steve_

Yeah I think that's what it is, I remember setting up a payroll system and it just wouldn't accept "zero" as the first digit so you can't use say, 000-000-000 as a holding SIN while you wait for them to give it to you. People use 999-999-999 instead.

I suppose you could do the same thing with an ITIN, reject any payroll entry that begins with "9", but it doesn't look quite as suspicious as one that begins with zero, imo. Looks like eight digits, more obvious.

Reminds me of that story about NASA and they spent a million dollars on having a ballpoint pen developed to use in zero gravity.

The Soviets used pencils.