95-13818. Taxpayer Identifying Numbers (TIN)  

  • [Federal Register Volume 60, Number 110 (Thursday, June 8, 1995)]
    [Proposed Rules]
    [Pages 30211-30217]
    From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
    [FR Doc No: 95-13818]
    
    
    
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    DEPARTMENT OF THE TREASURY
    
    Internal Revenue Service
    
    26 CFR Part 301
    
    [INTL-0024-94]
    RIN 1545-AS83
    
    
    Taxpayer Identifying Numbers (TIN)
    
    AGENCY: Internal Revenue Service (IRS), Treasury.
    
    ACTION: Withdrawal of notice of proposed rulemaking; Notice of proposed 
    rulemaking and notice of public hearing.
    
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    SUMMARY: This document withdraws the notice of proposed rulemaking 
    relating to taxpayer identifying numbers published in the Federal 
    Register on September 27, 1990, at 55 FR 39486. This document also 
    contains proposed amendments to the regulations relating to 
    requirements for furnishing a taxpayer identifying number on returns, 
    statements, or other documents. These amendments set forth procedures 
    for requesting a taxpayer identifying number for certain alien 
    individuals for whom a social security number is not available. These 
    numbers would be called ``IRS individual taxpayer identification 
    numbers.'' These amendments also require certain foreign persons to 
    furnish a taxpayer identifying number on their tax returns. This 
    document also provides notice of a public hearing on these proposed 
    regulations.
    
    DATES: Written comments and outlines of the oral comments to be 
    presented at the public hearing scheduled for 10 a.m. on September 28, 
    1995, must be received by September 7, 1995.
    
    ADDRESSES: Send submissions to: CC:DOM:CORP:T:R (INTL-0024-94), room 
    5228, Internal Revenue Service, POB 7604, Ben Franklin Station, 
    Washington, DC 20044. In the alternative, submissions may be hand 
    delivered between the hours of 8 a.m. and 5 p.m. to: CC:DOM:CORP:T:R 
    (INTL-0024-94), Courier's Desk, Internal Revenue Service, 1111 
    Constitution Avenue NW., Washington, DC. The public hearing will be 
    held in the Internal Revenue Service Auditorium, 7400 corridor, 1111 
    [[Page 30212]] Constitution Avenue, NW., Washington, DC.
    
    FOR FURTHER INFORMATION CONTACT: Concerning the regulations, Lilo A. 
    Hester (202) 874-1490; concerning submissions and the hearing, 
    Christina Vasquez (202) 622-7180 (not a toll-free numbers).
    
    SUPPLEMENTARY INFORMATION:
    
    Paperwork Reduction Act
    
        The collection of information contained in this notice of proposed 
    rulemaking has been submitted to the Office of Management and Budget 
    for review in accordance with the Paperwork Reduction Act (44 U.S.C. 
    3504(h)). Comments on the collection of information should be sent to 
    the Office of Management and Budget, Attn: Desk Officer for the 
    Department of the Treasury, Office of Information and Regulatory 
    Affairs, Washington, DC 20503, with copies to the Internal Revenue 
    Service, Attn: IRS Reports Clearance Officer, PC:FP, Washington, DC 
    20224.
        The collection of information from certain resident alien 
    individuals and foreign persons required to furnish taxpayer 
    identifying numbers under section 6109 of the Internal Revenue Code 
    (Code) is found in Sec. 301.6109-1. This information will be used by 
    the IRS for tax administration purposes. The likely respondents and 
    recordkeepers are certain resident alien individuals and foreign 
    persons such as nonresident alien individuals and foreign corporations 
    who make a return of tax.
        The burden for the collection of information contained in 
    Sec. 301.6109-1(d) is reflected in the burden of Form W-7.
    
    Background
    
        This document withdraws the notice of proposed rulemaking under 
    section 6109 published in the Federal Register on September 27, 1990 at 
    55 FR 39486. This document also contains proposed amendments to 26 CFR 
    part 301 to provide rules under section 6109 of the Internal Revenue 
    Code relating to a new type of taxpayer identifying number.
    
    Explanation of Provisions
    
    In General
    
        Section 6109(a) of the Code provides that, when required by 
    regulations, a person must furnish a taxpayer identifying number (TIN) 
    for securing proper identification of that person on any return, 
    statement, or other document made under the Code. The assignment of a 
    unique and permanent number to each taxpayer is important for the 
    effective operation of the IRS automatic data processing system. The 
    numbering system improves the IRS' ability to identify and access 
    database records; to match information provided on tax and information 
    returns, statements, and other documents with the proper taxpayers; and 
    to provide better customer service to taxpayers.
        The Treasury Department and the IRS are concerned about individuals 
    who are filing tax returns but who are unable to obtain a social 
    security number. In order to insure that all taxpayers required to 
    provide a TIN for tax purposes are able to obtain one, the IRS is 
    developing a separate numbering system that will make unique and 
    permanent numbers available to those individuals. The proposed 
    regulations explain how alien individuals, whether resident or 
    nonresident, can obtain an IRS individual taxpayer identification 
    number from the IRS.
        The regulations require any foreign person who makes a return to 
    provide a TIN on the return. This TIN may be an employer identification 
    number, a social security number, or a new IRS individual taxpayer 
    identification number in the case of an alien individual who does not 
    have a social security number and cannot obtain one.
        The Treasury Department and the IRS are also considering changes to 
    the procedures that apply to withholding tax on payments to foreign 
    persons in order to encourage compliance and reduce paperwork burden. 
    The Treasury Department and the IRS are aware that significant changes 
    in this area will impact some aspects of transactions subject to 
    withholding. Accordingly, the Treasury Department and the IRS intend to 
    move very cautiously, particularly by considering the possible effect 
    of changes in these procedures on investment decisions by foreign 
    persons and by considering the adequacy of existing procedures for 
    those taxpayers who wish to continue to comply with current rules. 
    Generally, no new procedures will be adopted without adequate 
    opportunity for public comment and appropriate transition periods 
    before taking effect. This will not, however, preclude the Treasury 
    Department and the IRS from adopting new procedures to replace the 
    current address rule for dividends.
    Specific Changes
    
        The most significant changes proposed by these regulations are 
    described below. The first change is the introduction of a new IRS-
    issued TIN for use by alien individuals who currently do not have, and 
    are not eligible to obtain, social security numbers. The number is 
    called an IRS individual taxpayer identification number (ITIN). This 
    number is intended to be issued to alien individuals, whether resident 
    or nonresident, who are currently required to furnish a number for tax 
    purposes but who are not entitled to obtain social security numbers. 
    Therefore, these amendments are designed to help taxpayers maintain 
    compliance with TIN requirements under the Code and regulations. The 
    Social Security Administration limits its assignment of social security 
    numbers to individuals who are U.S. citizens and alien individuals 
    legally admitted to the United States for permanent residence or under 
    other immigration categories which authorize U.S. employment. 
    Therefore, IRS-issued numbers are necessary for those individuals who 
    need a TIN but cannot qualify for a social security number.
        The second change is to modify the existing rule set forth in 
    Sec. 301.6109-1(g) that currently excludes from the general requirement 
    of providing a TIN, foreign persons that do not have either (1) income 
    effectively connected with the conduct of a U.S. trade or business or 
    (2) a U.S. office or place of business or a U.S. fiscal or paying 
    agent. Under the proposed regulations, the exclusion is modified to 
    require that any foreign person who makes a return of tax furnish its 
    TIN on that return. This change is intended solely to address the IRS' 
    and Treasury's concern that, without TINs, taxpayers cannot be 
    identified and tax returns cannot be processed effectively.
        The Treasury Department and the IRS are giving added thought to 
    applying the TIN requirement to facilitate changes to the procedures 
    that apply to withholding taxes on payments to foreign persons. 
    Decisions with respect to the withholding tax system have yet to be 
    made, and when made, will be proposed in subsequent regulations. The 
    Treasury Department and the IRS will proceed cautiously in expanding 
    the scope of the TIN requirement and will consider the adequacy of 
    existing procedures for those taxpayers who wish to continue to comply 
    with current rules.
        The IRS individual taxpayer identification numbers issued under 
    this regulation will differ from, and replace, the ``temporary'' TINs 
    the IRS currently issues under the authority of section 6109(c). For 
    example, after declaring in Rev. Rul. 84-158, 1984-2 C.B. 262, that a 
    partnership must request the social security numbers of its individual 
    partners (including a nonresident alien limited partner), the IRS 
    announced in Rev. Rul. 85-61, 1985-1 C.B. 355, that it would issue 
    [[Page 30213]] temporary numbers to nonresident alien limited partners 
    who do not have, and cannot obtain, social security numbers. All of 
    these temporary numbers, however, will be retired upon subsequent 
    revocation of these revenue rulings.
        IRS individual taxpayer identification numbers are intended for tax 
    use only. For example, the numbers will create no inference regarding 
    the immigration status of a foreign person or the right of that person 
    to be legally employed in the United States. The IRS individual 
    taxpayer identification numbers and the information obtained by the IRS 
    as a result of issuing numbers constitute confidential taxpayer 
    information. Section 6103 strictly prohibits the disclosure of this 
    information to other government agencies, private entities, or 
    citizens. Disclosure in violation of the restrictions under section 
    6103 may lead to civil or criminal penalties.
    
    Section-by-Section Analysis
    
        Proposed Sec. 301.6109-1(a)(1)(i) provides a general description of 
    the types of TINs, including the new IRS individual taxpayer 
    identification number. The IRS individual taxpayer identification 
    number will begin with a specific number designated by the IRS and will 
    otherwise resemble a social security number. Proposed Sec. 301.6109-
    1(a)(1)(ii) provides general rules for use of the different TINs, 
    including the rule for an estate to obtain and furnish its employer 
    identification number when required, such as in its capacity as a payor 
    or payee of royalties. This rule for estates was announced previously 
    in the proposed regulations under section 6109 published in the Federal 
    Register at 55 FR 39486 on September 27, 1990.
        The requirement for foreign persons to provide a TIN if they have 
    income effectively connected with the conduct of a U.S. trade or 
    business, if they have a U.S. office or place of business, or a U.S. 
    fiscal or paying agent during the taxable year, or if they are treated 
    as resident alien individuals under section 6013(g) or (h), is restated 
    without change in proposed Secs. 301.6109-1(b)(2) and (c). However, 
    proposed Sec. 301.6109-1(b)(2)(iv) modifies the exclusion currently 
    provided in Sec. 301.6109-1(g) with respect to other foreign persons by 
    providing that a foreign person filing a return of tax is subject to 
    the TIN requirements under section 6109. For this purpose, a return of 
    tax includes income, estate, and gift tax returns but excludes 
    information returns, statements or other documents. This requirement is 
    proposed to be effective for foreign persons who file returns of tax 
    after December 31, 1995.
        The provisions of Sec. 301.6109-1(d)(2) dealing with obtaining an 
    employer identification number are unchanged except to specify that a 
    Form SS-4 will be available from U.S. consular offices abroad. This 
    change is intended to accommodate those foreign persons that are 
    required to provide an employer identification number.
        The procedures governing the new IRS individual taxpayer 
    identification number, including procedures for obtaining such a 
    number, are set forth in proposed Sec. 301.6109-1(d)(3). An IRS 
    individual taxpayer identification number is applied for on Form W-7, 
    Application for IRS Individual Taxpayer Identification Number. Under 
    normal procedures, the application is submitted to the IRS for 
    processing together with required documentation designed to 
    substantiate foreign status, as well as true identity. Further guidance 
    will be issued to specify the types of acceptable documentation. 
    Because the IRS intends to rely as much as possible on the identifying 
    documents that are customarily used in a foreign jurisdiction to 
    identify a resident in that jurisdiction, the documentation 
    requirements are likely to vary from country to country. Comments and 
    suggestions are solicited regarding the type of documents that could be 
    used reliably to establish the identity of taxpayers and their foreign 
    status.
        The IRS is planning a wide distribution of application forms in the 
    United States and abroad and will insure that the form is easily 
    available to the public. Further, in order to facilitate the 
    application process and to expedite the issuance of the TINs, the 
    regulations propose to authorize agreements that would permit certain 
    persons to act as an applicant's agent. These agents are called 
    acceptance agents. Generally, an acceptance agent may include financial 
    institutions or educational institutions, i.e., institutions that are 
    likely to come in contact with a large number of foreign taxpayers 
    earning U.S. source income and that can establish to the IRS that they 
    have the resources and procedures necessary to undertake the duties 
    expected from an acceptance agent.
        Under an agreement with the IRS, an acceptance agent would assume 
    responsibility for providing the necessary information to the IRS for 
    the issuance of a number, together with a certification that the 
    applicant is a foreign person. The certification would be issued on the 
    basis of prescribed documentation obtained from the applicant. Under 
    this procedure, no documentation generally would be required to be 
    furnished to the IRS, except as part of a verification process by which 
    the IRS may periodically verify the agent's compliance with the 
    agreement. In order to streamline the process and facilitate the 
    agent's due diligence under the agreement, the agreement would specify 
    the type of documentation that must be obtained to verify foreign 
    status and true identity of an applicant.
        Proposed Sec. 301.6109-1(d)(4) provides rules for the coordination 
    of the different TINs. A person entitled to a social security number 
    will not be issued an IRS individual taxpayer identification number. 
    Once a person has a social security number, that number must be used 
    for all tax purposes, even though the person is a nonresident alien. A 
    nonresident alien who is issued an IRS individual taxpayer 
    identification number and later becomes entitled to a social security 
    number (e.g., becomes a U.S. resident under an immigration visa) must 
    apply for a social security number and must stop using the IRS number. 
    IRS matching systems will help the IRS detect taxpayers who are 
    incorrectly using an IRS individual taxpayer identification number. The 
    IRS will contact those individuals and request that they obtain a 
    social security number.
        Section 301.6109-1(f) is modified to cross reference the new 
    penalty provisions under sections 6721 through 6724.
        Proposed Sec. 301.6109-1(g)(1) provides the general rule that, in 
    the IRS records, a person with a social security number or an employer 
    identification number will normally be identified as a U.S. person. 
    Regulations to be issued at a later time may make it important for a 
    person to be identified correctly in the IRS records as a U.S. or a 
    foreign person. Accordingly, these proposed regulations provide that 
    the foreign person with a social security number or an employer 
    identification number may establish foreign status with the IRS. Any 
    foreign person that holds an employer identification number issued 
    prior to the effective date of this proposed regulation may continue to 
    use its employer identification number for tax purposes. However, when 
    requested by the IRS, such persons must apply for a new employer 
    identification number that is exclusively dedicated to foreign persons. 
    Proposed Sec. 301.6109-1(g)(1) also provides that an IRS individual 
    taxpayer identification number is considered by the IRS to belong to a 
    nonresident alien individual if the foreign status of the individual is 
    established upon initial application for the number. If foreign status 
    is not [[Page 30214]] established, the IRS will generally require the 
    individual to apply for a social security number. In rare cases when a 
    resident alien individual is not eligible for a social security number, 
    the taxpayer will be entitled to use an IRS individual taxpayer 
    identification number, and the IRS will note in its records that the 
    number belongs to a U.S. person.
        No re-filings are required in order to maintain foreign status 
    described in proposed Sec. 301.6109-1(g)(1). However, proposed 
    Sec. 301.6109-1(g)(2) provides that if circumstances change (for 
    example, a taxpayer becomes a U.S. resident), then the taxpayer must 
    notify the IRS to record the change of status. The IRS will issue 
    guidance on procedures for notifying the IRS of a person's status or 
    changes thereof.
        Proposed Sec. 301.6109-1(g)(3) concerns disclosure provisions. In 
    order to make the acceptance agent's procedures possible, it is 
    necessary that taxpayers requesting a TIN through an acceptance agent 
    authorize the disclosure of taxpayer information to the extent 
    necessary to allow communications between the IRS and the acceptance 
    agent in the course of the issuance and administration of the number. 
    Accordingly, the application form will include a waiver of the 
    prohibition against disclosure of taxpayer information in order to 
    permit the IRS to communicate with an acceptance agent regarding 
    matters related to the assignment of a TIN.
    
    Proposed Effective Date
    
        These regulations would apply to returns, statements, or documents 
    filed after December 31, 1995, except the provision relating to the 
    requirement for an estate to obtain an employer identification number 
    applies on and after January 1, 1984. Thus, these regulations would 
    apply to foreign persons described in proposed Sec. 301.6109-
    1(b)(2)(iv) who file a return of tax after December 31, 1995.
    
    Special Analyses
    
        It has been determined that this notice of proposed rulemaking is 
    not a significant regulatory action as defined in EO 12866. Therefore, 
    a regulatory assessment is not required. It also has been determined 
    that section 553(b) of the Administrative Procedure Act (5 U.S.C. 
    chapter 5) and the Regulatory Flexibility Act (5 U.S.C. chapter 6) do 
    not apply to these regulations, and, therefore, a Regulatory 
    Flexibility Analysis is not required. Pursuant to section 7805(f) of 
    the Internal Revenue Code, this notice of proposed rulemaking will be 
    submitted to the Chief Counsel for Advocacy of the Small Business 
    Administration for comment on its impact on small business.
    
    Comments and Public Hearing
    
        Before these proposed regulations are adopted as final regulations, 
    consideration will be given to any written comments that are submitted 
    timely (preferably a signed original and eight (8) copies) to the IRS. 
    All comments will be available for public inspection and copying.
        A public hearing has been scheduled for 10 a.m. on September 28, 
    1995. Because of access restrictions, visitors will not be admitted 
    beyond the Internal Revenue Building lobby more than 15 minutes before 
    the hearing starts.
        The rules of 26 CFR 601.601(a)(3) apply to the hearing.
        Persons that wish to present oral comments at the hearing must 
    submit written comments and an outline of the topics to be discussed 
    and the time to be devoted to each topic by September 7, 1995.
        A period of 10 minutes will be allotted to each person for making 
    comments.
        An agenda showing the scheduling of the speakers will be prepared 
    after the deadline for receiving outlines has passed. Copies of the 
    agenda will be available free of charge at the hearing.
    
    Drafting Information
    
        The principal author of these proposed regulations is Lilo A. 
    Hester of the Office of Associate Chief Counsel (International), within 
    the Office of Chief Counsel, IRS. However, other personnel from the IRS 
    and Treasury Department participated in their development.
    
    Withdrawal of Proposed Regulations
    
        The previously proposed regulations under Sec. 301.6109-1, as 
    published in the Federal Register on September 27, 1990, at 55 FR 
    39486, are hereby withdrawn.
    
    List of Subjects in 26 CFR Part 301
    
        Employment taxes, Estate taxes, Excise taxes, Gift taxes, Income 
    taxes, Penalties, Reporting and recordkeeping requirements.
    
    Proposed Amendments to the Regulations
    
        Accordingly, 26 CFR part 301 is proposed to be amended as follows:
    
    PART 301--PROCEDURE AND ADMINISTRATION
    
        Paragraph 1. The authority citation for part 301 is amended by 
    adding an entry in numerical order to read in part as follows:
    
        Authority: 26 U.S.C. 7805 * * *
    
        Section 301.6109-1 also issued under 26 U.S.C. 6109(a), (c), and 
    (d). * * *
    
        Par. 2. Section Sec. 301.6109-1 is amended as follows:
    
        1. Paragraphs (a)(1), (b), (c), and (d)(2) are revised.
        2. Paragraphs (d)(3) and (4) are added.
        3. Paragraphs (f), (g), and (h) are revised.
        The revisions and additions read as follows:
    
    
    Sec. 301.6109-1  Identifying numbers.
    
        (a) In general--(1) Taxpayer identifying numbers--(i) Types. There 
    are generally three types of taxpayer identifying numbers: social 
    security numbers, Internal Revenue Service (IRS) individual taxpayer 
    identification numbers, and employer identification numbers. Social 
    security numbers take the form 000-00-0000, IRS individual taxpayer 
    identification numbers take the form 000-00-0000 but begin with a 
    specific number designated by the IRS, and employer identification 
    numbers take the form 00-0000000. Both social security numbers and IRS 
    individual taxpayer identification numbers identify individual persons. 
    For the definition of social security number and employer 
    identification number, see Secs. 301.7701-11 and 301.7701-12, 
    respectively. For the definition of IRS individual taxpayer 
    identification number, see paragraph (d)(3) of this section.
        (ii) Uses. Except as otherwise provided in applicable regulations 
    under this title or on a return, statement, or other document, and 
    related instructions, taxpayer identifying numbers must be used as 
    follows:
        (A) Except as otherwise provided in paragraphs (a)(1)(ii)(B) and 
    (D) of this section, an individual required to furnish a taxpayer 
    identifying number must use a social security number.
        (B) Except as otherwise provided in paragraph (a)(1)(ii)(D) of this 
    section, an individual required to furnish a taxpayer identifying 
    number but who is not eligible to obtain a social security number, must 
    use an IRS individual taxpayer identification number.
        (C) Any person other than an individual (such as corporations, 
    partnerships, nonprofit associations, trusts, estates, and similar 
    nonindividual persons) that is required to furnish a taxpayer 
    identifying number must use an employer identification number.
        (D) An individual, whether U.S. or foreign, who is an employer or 
    who is engaged in trade or business as a sole proprietor should use an 
    employer identification number as required by [[Page 30215]] returns, 
    statements, or other documents and their related instructions.
    * * * * *
        (b) Requirement to furnish one's own number--(1) U.S. persons. 
    Every U.S. person who makes under this title a return, statement, or 
    other document must furnish its own taxpayer identifying number as 
    required by the forms and the accompanying instructions. A U.S. person 
    whose number must be included on a document filed by another person 
    must give the taxpayer identifying number so required to the other 
    person on request. For penalties for failure to supply taxpayer 
    identifying numbers, see sections 6721 through 6724. For provisions 
    dealing specifically with the duty of employees with respect to their 
    social security numbers, see Sec. 31.6011(b)-2 (a) and (b) of this 
    chapter (Employment Tax Regulations). For provisions dealing 
    specifically with the duty of employers with respect to employer 
    identification numbers, see Sec. 31.6011(b)-1 of this chapter 
    (Employment Tax Regulations).
        (2) Foreign persons. The provisions of paragraph (b)(1) of this 
    section regarding the furnishing of one's own number shall apply to the 
    following foreign persons--
        (i) A foreign person that has income effectively connected with the 
    conduct of a U.S. trade or business at any time during the taxable 
    year;
        (ii) A foreign person that has a U.S. office or place of business 
    or a U.S. fiscal or paying agent at any time during the taxable year;
        (iii) A nonresident alien treated as a resident under section 
    6013(g) or (h); and
        (iv) Any other foreign person who makes a return of tax under this 
    title (including income, estate, and gift tax returns) but excluding 
    information returns, statements, or documents.
        (c) Requirement to furnish another's number. Every person required 
    under this title to make a return, statement, or other document must 
    furnish such taxpayer identifying numbers of other U.S. persons and 
    foreign persons that are described in paragraph
        (b)(2) (i), (ii), or (iii) of this section as required by the forms 
    and the accompanying instructions. If the person making the return, 
    statement, or other document does not know the taxpayer identifying 
    number of the other person, such person must request the other person's 
    number. A request should state that the identifying number is required 
    to be furnished under authority of law. When the person making the 
    return, statement, or other document does not know the number of the 
    other person, and has complied with the request provision of this 
    paragraph, such person must sign an affidavit on the transmittal 
    document forwarding such returns, statements, or other documents to the 
    Internal Revenue Service, so stating. A person required to file a 
    taxpayer identifying number shall correct any errors in such filing 
    when such person's attention has been drawn to them.
        (d) * * *
        (2) Employer identification number. Any person required to furnish 
    an employer identification number must apply for one, if not done so 
    previously, on Form SS-4. A Form SS-4 may be obtained from any office 
    of the Internal Revenue Service, U.S. consular office abroad, or from 
    an acceptance agent described in paragraph (d)(3)(iv) of this section. 
    The person must make such application in advance of the first required 
    use of the employer identification number to permit issuance of the 
    number in time for compliance with such requirement. The form, together 
    with any supplementary statement, must be prepared and filed in 
    accordance with the form, accompanying instructions, and relevant 
    regulations, and must set forth fully and clearly the requested data.
        (3) IRS individual taxpayer identification number--(i) Definition. 
    The term IRS individual taxpayer identification number means a taxpayer 
    identifying number issued to an alien individual by the Internal 
    Revenue Service, upon application, for use in connection with filing 
    requirements under this title. The term IRS individual taxpayer 
    identification number does not refer to a social security number or an 
    account number for use in employment for wages. For purposes of this 
    section, the term alien individual means an individual who is not a 
    citizen or national of the United States.
        (ii) General rule for obtaining number. Any individual who is not 
    eligible to obtain a social security number and is required to furnish 
    a taxpayer identifying number must apply for an IRS individual taxpayer 
    identification number on Form W-7, Application for IRS Individual 
    Taxpayer Identification Number, or such other form as may be prescribed 
    by the Internal Revenue Service. Form W-7 may be obtained from any 
    office of the Internal Revenue Service, U.S. consular office abroad, or 
    any acceptance agent described in paragraph (d)(3)(iv) of this section. 
    The individual shall furnish the information required by the form and 
    accompanying instructions, including the individual's name, address, 
    foreign tax identification number (if any), and specific reason for 
    obtaining an IRS individual taxpayer identification number. The 
    individual must make such application in advance of the first required 
    use of the IRS individual taxpayer identification number to permit 
    issuance of the number in time for compliance with such requirement. 
    The application form, together with any supplementary statement and 
    documentation, must be prepared and filed in accordance with the form, 
    accompanying instructions, and relevant regulations, and must set forth 
    fully and clearly the requested data.
        (iii) General rule for assigning number. Under procedures issued by 
    the Internal Revenue Service, an IRS individual taxpayer identification 
    number will be assigned to an individual upon the basis of information 
    reported on Form W-7 (or such other form as may be prescribed by the 
    Internal Revenue Service) and any such accompanying documentation that 
    may be required by the Internal Revenue Service. An applicant for an 
    IRS individual taxpayer identification number must submit such 
    documentary evidence as the Internal Revenue Service may prescribe in 
    order to establish alien status and identity. Examples of acceptable 
    documentary evidence for this purpose may include items such as an 
    original (or a certified copy of the original) passport, driver's 
    license, birth certificate, identity card, or U.S. visa.
        (iv) Acceptance agents--(A) Agreements with acceptance agents. A 
    person described in paragraph (d)(3)(iv)(B) of this section will be 
    accepted by the Internal Revenue Service to act as an acceptance agent 
    for purposes of the regulations under this section upon entering into 
    an agreement with the Internal Revenue Service, under which the 
    acceptance agent will be authorized to act on behalf of taxpayers 
    seeking to obtain a taxpayer identifying number from the Internal 
    Revenue Service. The agreement must contain such terms and conditions 
    as are necessary to insure proper administration of the process by 
    which the Internal Revenue Service issues taxpayer identifying numbers 
    to foreign persons, including proof of their identity and foreign 
    status. In particular, the agreement may contain--
        (1) Procedures for providing Form SS-4 and Form W-7, or such other 
    necessary form to applicants for obtaining a taxpayer identifying 
    number;
        (2) Procedures for providing assistance to applicants in completing 
    [[Page 30216]] the application form or completing it for them;
        (3) Procedures for collecting, reviewing, and maintaining, in the 
    normal course of business, a record of the required documentation for 
    assignment of a taxpayer identifying number;
        (4) Procedures for submitting the application form and required 
    documentation to the Internal Revenue Service, or if permitted under 
    the agreement, submitting the application form together with a 
    certification that the acceptance agent has reviewed the required 
    documentation and that it has no actual knowledge or reason to know 
    that the documentation is not complete or accurate;
        (5) Procedures for assisting taxpayers with notification procedures 
    described in paragraph (g)(2) of this section in the event of change of 
    foreign status;
        (6) Procedures for making all documentation or other records 
    furnished by persons applying for a taxpayer identifying number 
    promptly available for review by the Internal Revenue Service, upon 
    request; and
        (7) Provisions that the agreement may be terminated in the event of 
    a material failure to comply with the agreement, including failure to 
    exercise due diligence under the agreement.
        (B) Persons who may be acceptance agents. An acceptance agent may 
    include any financial institution as defined in section 265(b)(5) or 
    Sec. 1.165-12(c)(1)(v) of this chapter, any college or university that 
    is an educational organization as defined in Sec. 1.501(c)(3)-
    1(d)(3)(i) of this chapter, any federal agency as defined in section 
    6402(f) or any other person or categories of persons that may be 
    authorized by regulations or Internal Revenue Service procedures. A 
    person described in this paragraph (d)(3)(iv)(B) that seeks to qualify 
    as an acceptance agent must have an employer identification number for 
    use in any communication with the Internal Revenue Service. In 
    addition, it must establish to the satisfaction of the Internal Revenue 
    Service that it has adequate resources and procedures in place to 
    comply with the terms of the agreement described in paragraph 
    (d)(3)(iv)(A) of this section.
        (4) Coordination of taxpayer identifying numbers--(i) Social 
    security number. Any individual who is duly assigned a social security 
    number or who is entitled to a social security number will not be 
    issued an IRS individual taxpayer identification number. The individual 
    can use the social security number for all tax purposes under this 
    title, even though the individual is, or later becomes, a nonresident 
    alien individual. Further, any individual who has an application 
    pending with the Social Security Administration will be issued an IRS 
    individual taxpayer identification number only after the Social 
    Security Administration has notified the individual that a social 
    security number cannot be issued. Any alien individual duly issued an 
    IRS individual taxpayer identification number who later becomes a U.S. 
    citizen, or an alien lawfully permitted to enter the United States 
    either for permanent residence or under authority of law permitting 
    U.S. employment, will be required to obtain a social security number. 
    Any individual who has an IRS individual taxpayer identification number 
    and a social security number, due to the circumstances described in the 
    preceding sentence, must notify the Internal Revenue Service of the 
    acquisition of the social security number and must use the newly-issued 
    social security number as the taxpayer identifying number on all future 
    returns, statements, or other documents filed under this title.
        (ii) Employer identification number. Any individual with both a 
    social security number (or an IRS individual taxpayer identification 
    number) and an employer identification number may use the social 
    security number (or the IRS individual taxpayer identification number) 
    for individual taxes, and the employer identification number for 
    business taxes as required by returns, statements, and other documents 
    and their related instructions. Any alien individual duly assigned an 
    IRS individual taxpayer identification number who also is required to 
    obtain an employer identification number must furnish the previously-
    assigned IRS individual taxpayer identification number to the Internal 
    Revenue Service on Form SS-4 at the time of application for the 
    employer identification number. Similarly, where an alien individual 
    has an employer tax identification number and is required to obtain an 
    IRS individual taxpayer identification number, the individual must 
    furnish the previously-assigned employer identification number to the 
    Internal Revenue Service on Form W-7, or such other form as may be 
    prescribed by the Internal Revenue Service, at the time of application 
    for the IRS individual taxpayer identification number.
    * * * * *
        (f) Penalty. For penalties for failure to supply taxpayer 
    identifying numbers, see sections 6721 through 6724.
        (g) Special rules for taxpayer identifying numbers issued to 
    foreign persons--(1) General rule--(i) Social security number. A social 
    security number is generally identified in the records and database of 
    the Internal Revenue Service as a number belonging to a U.S. citizen or 
    resident alien individual. A person may establish a different status 
    for the number by providing proof of foreign status with the Internal 
    Revenue Service under such procedures as the Internal Revenue Service 
    shall prescribe, including the use of a form as the Internal Revenue 
    Service may specify. Upon accepting an individual as a nonresident 
    alien individual, the Internal Revenue Service will assign this status 
    to the individual's social security number.
        (ii) Employer identification number. An employer identification 
    number is generally identified in the records and database of the 
    Internal Revenue Service as a number belonging to a U.S. person. 
    However, the Internal Revenue Service may establish a separate class of 
    employer identification numbers solely dedicated to foreign persons 
    which will be identified as such in the records and database of the 
    Internal Revenue Service. A person may establish a different status for 
    the number either at the time of application or subsequently by 
    providing proof of U.S. or foreign status with the Internal Revenue 
    Service under such procedures as the Internal Revenue Service shall 
    prescribe, including the use of a form as the Internal Revenue Service 
    may specify. The Internal Revenue Service may require a person to apply 
    for the type of employer identification number that reflects the status 
    of that person as a U.S. or foreign person.
        (iii) IRS individual taxpayer identification number. An IRS 
    individual taxpayer identification number is generally identified in 
    the records and database of the Internal Revenue Service as a number 
    belonging to a nonresident alien individual. If the Internal Revenue 
    Service determines at the time of application or subsequently, that an 
    individual is not a nonresident alien individual, the Internal Revenue 
    Service may require that the individual apply for a social security 
    number. If a social security number is not available, the Internal 
    Revenue Service may accept that the individual use an IRS individual 
    taxpayer identification number, which the Internal Revenue Service will 
    identify as a number belonging to a U.S. resident alien.
        (2) Change of foreign status. Once a taxpayer identifying number is 
    identified in the records and database of the Internal Revenue Service 
    as a number belonging to a U.S. or foreign person, the status of the 
    number is [[Page 30217]] permanent until the circumstances of the 
    taxpayer change. A taxpayer whose status changes (for example, a 
    nonresident alien individual with a social security number becomes a 
    U.S. resident alien) must notify the Internal Revenue Service of the 
    change of status under such procedures as the Internal Revenue Service 
    shall prescribe, including the use of a form as the Internal Revenue 
    Service may specify.
        (3) Waiver of prohibition to disclose taxpayer information when 
    acceptance agent acts. As part of its request for an IRS individual 
    taxpayer identification number or submission of proof of foreign status 
    with respect to any taxpayer identifying number, where the foreign 
    person acts through an acceptance agent, the foreign person will agree 
    to waive the limitations in section 6103 regarding the disclosure of 
    certain taxpayer information. However, the waiver will apply only for 
    purposes of permitting the Internal Revenue Service and the acceptance 
    agent to communicate with each other regarding matters related to the 
    assignment of a taxpayer identifying number and change of foreign 
    status.
        (h) Effective date. The provisions of this section generally are 
    effective for any return, statement, or other document to be filed 
    after December 31, 1995. However, the provision of paragraph (a)(1)(ii) 
    of this section that requires an estate to obtain an employer 
    identification number applies on and after January 1, 1984.
    Margaret Milner Richardson,
    Commissioner of Internal Revenue.
    [FR Doc. 95-13818 Filed 6-7-95; 8:45 am]
    BILLING CODE 4830-01-U
    
    

Document Information

Published:
06/08/1995
Department:
Internal Revenue Service
Entry Type:
Proposed Rule
Action:
Withdrawal of notice of proposed rulemaking; Notice of proposed rulemaking and notice of public hearing.
Document Number:
95-13818
Dates:
Written comments and outlines of the oral comments to be presented at the public hearing scheduled for 10 a.m. on September 28, 1995, must be received by September 7, 1995.
Pages:
30211-30217 (7 pages)
Docket Numbers:
INTL-0024-94
RINs:
1545-AS83: Amendment to Section 6109 Regulations
RIN Links:
https://www.federalregister.gov/regulations/1545-AS83/amendment-to-section-6109-regulations
PDF File:
95-13818.pdf
CFR: (5)
26 CFR 1.165-12(c)(1)(v)
26 CFR 301.6109-1(d)
26 CFR 301.6109-1(g)
26 CFR 301.6109-1(g)(2)
26 CFR 301.6109-1