What are ITIN Exceptions? In Which Circumstances Do Exceptions Apply?

What are ITIN Exceptions? In Which Circumstances Do Exceptions Apply?

ITIN exceptions include criteria applied by the IRS in some cases. Individuals with relevant circumstances may be placed on an exception list by the IRS. Of course, it is also important that these exceptions are provable. As ein-itin.com, we would like to give you detailed information about IRS  ITIN exceptions.

What Is an ITIN Number?

Before touching on ITIN exceptions, we want to give information about the individual taxpayer identification number. ITIN application is a process that non-US citizens must complete to file taxes. The IRS also evaluates applicants. If the IRS approves your application, you will be given a 9-digit number and can use an ITIN.

ITIN is a number that replaces SSNs and is essential for tax reporting. However, in some cases, there are exceptions that the IRS applies. Exceptions to IRS requirements for ITIN can be grouped under five headings:

  • Third-Party Withholding on Passive Income
  • ITIN Exceptions for Other Incomes
  • Third-Party Reporting of Mortgage Interest
  • Third-Party Withholding—Disposition by a Foreign Person of U.S. Real Property Interest
  • Reporting Obligations under TD (Treasury Decision) 9363

1- ITIN Exceptions for Third-Party Withholding on Passive Income

Within the ITIN exceptions list, third-party withholding on passive income plays an active role. Accordingly, it is possible to apply exceptions in the following cases:

  • Individuals who are investors in US companies
  • People who are partners in a US company
  • Individuals who receive income from the United States, such as stocks or rental income

The situations mentioned above are considered exceptions by the IRS. It is obligatory to prove these situations, which are within the scope of ITIN number expectations, to the IRS. Otherwise, the exceptional situation disappears and is deemed not to have existed.

2- ITIN Exceptions for Other Income Situations

The things to do within the scope of W7 instructions can be considered as an exception in some cases. These situations include special income issues specified by the IRS. For example, if scholarship payments are made to a foreign student studying in the USA, exceptions apply. Likewise, compensation received according to the US tax treaty may also be among the exceptional cases.

3- Third-Party Reporting Mortgage Interest

The IRS may also make certain exemptions based on the ITIN for people with home mortgage loans. People in this situation may not have to fulfill their obligations by falling within the scope of ITIN exceptions. Of course, providing sufficient evidence to the IRS is important in such cases. If you wish, you can consult ein-itin.com to get more detailed information on the subject. If your situation fits, then you do not have to apply.

4- Third-Party Withholding—Disposition by a Foreign Person of U.S. Real Property Interest

Persons who are parties to the disposal of a real estate interest in the USA by a foreign national can also benefit from exceptional circumstances. If you have such a situation, you will need to apply the following:

  • Form 8288 or Form 8288-A and/or Form 8288-B must be completed in full.
  • It is also important to submit the relevant contract of sale to the IRS.

Individuals who meet the above criteria are also considered ITIN exceptions by the IRS.

5- Reporting Obligations under TD (Treasury Decision) 9363 for ITIN Exceptions

This exception may apply if you have an IRS reporting obligation under TD 9363. If you have this condition, you must submit form W-7 and form 13350 to the IRS. The IRS will review your documents and decide whether you are eligible for ITIN exceptions.

You may need to declare documents proving your situation for all these exceptional cases. In this way, ITIN exceptions come into play and exempt you from some tax liabilities.

How to Apply for an ITIN Number?

For matters that do not fall under ITIN exceptions, if you do not have an ITIN number, you must apply. In this way, you can start fulfilling your tax obligations for that year. To apply for ITIN, you will first need to fill out the W-7 form completely. Filling out the form is important for the application to be accepted.

When applying for an ITIN, you must declare your identification information and passport to the IRS. People not residing in the USA can use a virtual address when applying. However, it is important that you provide your full address in order for your documents to be returned to you.

ITIN Applications with ein-itin.com

You can contact our company for information about ITIN or EIN applications and ITIN exceptions. Our company will provide you with the necessary service in all your applications to the IRS. Moreover, it is also possible to apply for your ITIN online with us. 

You can also get support to ensure your ITIN or EIN application is completed smoothly. Moreover, you can contact us to get information about issues such as ITIN exceptions.