1. Expiring ITINS & Renewals under the PATH Act
Luz A. Arévalo, Sr. Attorney
Linda E. Neary, Attorney
Greater Boston Legal Services LITC

2. What is an ITIN?
A number created for tax purposes to enable people ineligible for a SSN to pay taxes
ITINs are NOT SSNs – though both have 9 digits, an ITIN will always begin with a 9 and have a 7 or 8 in the fourth place: 9xx-7x-xxxx
ITINs do not provide legal status or work authorization, but many immigrants have ITINs (both EWIs and those lawfully present).

3. What an ITIN is NOT
Not an immigration enforcement tool, because the fact that the IRS does not share applicants’ private information is key to immigration compliance

4. Expiring ITINs The following ITINs will expire by 12/31/16:
ITINS with middle digits 78 or 79, e.g.:
9xx-78-xxxx and 9xx-79-xxxx, as well as
All ITINs not used to file a U.S. tax return at least once for tax years 2013, 2014, or 2015
TPs who filed tax returns at least once in the past 3 years and have expiring ITINs (i.e., middle digits 78 or 79) will get a letter from the IRS explaining how to renew their ITINS (Letter 5821)

5. Renewing ITINs
If a person with an expiring ITIN plans to file a tax return or claim a refund in 2017, the person should renew her ITIN and may do so beginning 10/1/16.
The person should submit a Completed Form W-7 and all required identification documents to:
Internal Revenue Service
ITIN Operation
P.O. Box
Austin, TX
Only original identification documents or certified copies of same should be submitted

6. Renewing ITINs
Persons with expiring ITINs can renew ITINs of family members even if those numbers are not expiring.
All family members should submit a Form W- 7 and supporting documents at the same time

7. Do Not Renew an ITIN
If the taxpayer has or is eligible for a SSN

8. How a Tax Clinic Can Help
1. Am I a resident for tax purposes? The definition of “resident” under tax law is not the same as under immigration law. IRC For undocumented workers, we often use the substantial presence test. Generally, some foreign government-related individual, teacher, trainee, or student who is present in the United States on an A, F, J, M, or Q visa, cannot qualify as “residents” under the substantial presence test. See IRC, secs

9. How a Tax Clinic Can Help
How do I get a Tax ID number (i.e., an ITIN, Individual Taxpayer Identification Number)?
No tax return will be processed under a “fake” social security number. Taxpayer needs a valid Tax ID Number. 26 CFR
Application is free!

10. How a Tax Clinic Can Help
3. Am I an employee or an Independent Contractor? Misclassified workers may have more options when reporting income: substitute W2 (half of self employment tax) or Schedule C with business expenses. Option depends on immigration status, and nature of the work.

11. How a Tax Clinic Can Help
Do I qualify for Tax Credits?
Beware of fraudulent tax preparers who claim EITC from the State only under fake SSNs; or change data after taxpayer leaves; adds preparer’s personal bank account to the return

12. Credits & Deductions: How do they differ?
Deductions are subtracted from income, and thus reduce the filer’s ultimate taxable income. They are worth more to high-income filers than to low- income filers.
Credits are subtracted from the tax the filer owes, and thus reduce the filer’s actual taxes. Some credits are also refundable in cash to the taxpayer even if no tax is owed, e.g., the Earned Income Tax Credit (EITC).

13. TAX CREDITS
Earned Income Tax Credit – Up to $6,252
Child Tax Credit – Up to $1,000 per child
Additional Child Tax Credit
Premium Tax Credit
American Opportunity Tax Credit
Circuit Breaker Credit – MA, Up to $1,070
All except Child Tax Credit are refundable tax credits. That is, Taxpayer receives money if no taxes owed or if credit is larger than tax owed.
Sample Tax Return

14. TAX CREDITS
Earned Income Tax Credit and Premium Tax Credit require SSNs
All others (including Child Tax Credit, Additional Child Tax Credit, Child and Dependent Care Credit; American Opportunity Credit, and Circuit Breaker Credit) can be claimed with ITINs or SSNs.

15. The process is known as “unscrambling” earnings with SSA
LITCs will amend returns when SSN is assigned, so client gets credit towards pension
The process is known as “unscrambling” earnings with SSA
See “Who Said Your Immigration Client Cannot Get Credit for Social Security Payments?”
Bender’s Immigration Bulletin, Vol. 19, No. 21, November 1, 2014, pp

16. COMMON MISTAKES OUR IMMIGRANT CLIENTS MAKE AND HOW TO AVOID THEM: NOT COMPLETING W-4 CORRECTLY
Too many allowances/exemptions = taxes owed
Too few allowances/exemptions = TP is making a loan to
Uncle Sam (interest free!)

17. COMMON MISTAKES: CASH INCOME
Not keeping track of cash income and expenses

18. COMMON MISTAKES: Filing as “Single” when Spouse is Overseas
A legal marriage elsewhere is considered a legal marriage in the U.S.
Usually the overseas spouse is not earning income and depends on remittances from spouse in the U.S.
Note: Mexican dependents living in Mexico can be claimed by U.S. taxpayers.
Refer to Attorney!

19. 2015 PATH Act* Makes the EITC and CTC permanent
Deactivates certain ITINs
Denies recent SSN recipients retroactive EITC claims
Eliminates retroactive claims to Child Tax Credit for new ITIN filers
Denies retroactive American Opportunity Credit claims for recent ITIN applicants
Refer to Attorney!
*Protecting Americans from Tax Hikes Act (PATH)

20. ITINS DEACTIVATION DATES
If the ITIN Was Issued:
The ITIN Will Deactivate On:
Before January 1, 2008
January 1, 2017
In 2008
January 1, 2018
In 2009 or 2010
January 1, 2019
In 2011 or 2012
January 1, 2020
See Protecting Americans from Tax Hikes Act (PATH) § 203

21. New, under PATH
Foreign nationals should be sure to file their taxes on time! ITINs and newly assigned SSNs can no longer be used to claim the EITC, CTC and the AOTC retroactively.

22. interactive EITC model
There are options available to taxpayers who owe taxes: Hardship requests, Offers in Compromise, Payment Plans, and Bankruptcy

23. List of Low-Income Taxpayer Clinics (LITCs)
Greater Boston Legal Services
197 Friend Street
Boston, MA 02114
(617) 371-­1234; (617) 603-­1569
Low Income Taxpayer Clinic
Springfield Partners for Community Action
721 State Street
Springfield, MA 01109
(413)
Federal Tax Clinic at the Legal Services Center of Harvard Law School
122 Boylston Street
Jamaica Plain, MA 02130
(617)
Bentley University Low Income Taxpayer Clinic
175 Forest Street MOR 133
Waltham, MA 02452
(781)