If an ITIN is not used on a US tax return (either Form 1040 or Form 1040NR) at once every three years, then yes the number will expire for filing purposes.
This is something that came into place a few years ago as a result of the passing of the PATH Act (Protecting Americans from Tax Hikes Act).
All ITINs ever issued have gone trough this process over the last few years and now going forward the three year non filing rule applies.
What does that mean for me?
Well, the primary purpose of an ITIN is to file a US tax return each year. If a tax return is not filed (as one is not required), that's ok, but you need to be aware that if later down the line you do file, then any refund or credits due to you will not be issued until the renewal of the ITIN occurs.
This also applies if you recently sold a US property and had an ITIN a long time ago. When selling your US holiday home or timeshare you should ensure you renew the number as well. This will make filing a claim for a refund of US tax a little easier. Else you have to wait for a letter from the IRS advising the refund will not be paid until renewed, adding further delays to receiving back any monies.
When selling a US property as a non resident, 15% tax is held on the gross sale (FIRPTA) and to reclaim this, you must file a US tax return (including an active ITIN).
Contact Just Breve for more information:
Just Breve - is a US tax accounting firm, assisting non US persons with their US tax filing requirements. This includes applying for a new ITIN or renewing an existing ITIN. We are a certifying acceptance agent and have a contract with the IRS to help with Form W-7 ITIN applications.
T: 0208 1444632
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