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Issue 41565

TIN matching with Form 8966s under FATCA

Issue Statement: Nearly half of FFI 8966s do not contain valid TIN/SSNs. The reason is not recalcitrant banks since banks can do nothing about the problem.

Rather, there are 2 sources: (1) filers have no SSN and find it difficult to obtain one; and (2) they have one but resist disclosing it to FFIs with no concern for the security issues involved. A simple solution is for IRS to issue ITINs to expats, accidental Americans and dual nationals on demand. This would cut SSA, for whom FATCA-related issues are distractions from their core mission and which is subject to its own legal and political constraints which make it difficult for them to be helpful, out of the picture. Since IRS issues ITINs on its own for no purpose but tax processing there are no administrative or practical issues involved in doing this. I have no idea whether enabling legislation might be needed, but such legislation would be uncontroversial and so a trivial attachment to some larger bill when convenient can easily do the job. If the grace period for FATCA compliance is extended for two years that would allow a year for accidentals and dual nationals to obtain ITINs without raising SSN-related issues or concerns, and a second year for 8966 reporting to proceed with ITINs.

Goal Statement: To determine if the IRS needs to issue an individual tax identification number (ITIN) to each American living overseas who requests one.

TAP RECOMMENDATION

Issue 41565 The IRS should issue an ITIN to each American living overseas who requests one.

irs action:Not adopted

Issue 41565

Since it recommends assigning ITINs to accidental Americans, etc., this should go to the ITIN Unit in W&I. We previously had cross-BOD discussions on this topic and determined there are limitations on what can be done. As we understand it, Congress requested the Service to reduce the number of ITINs it issues. This proposal would generate a significant increase in ITINs. Furthermore, current provisions would not allow the Service to issue an ITIN to someone eligible to receive an SSN.

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