PART 2 – ACCEPTANCE AGENT/ CERTIFYING ACCEPTANCE AGENT INFORMATION:

Revenue Procedure 2006-10 describes the application procedures for becoming an Acceptance Agent and the requisite Agreement that must be executed with the IRS. Persons may wish to become an Acceptance Agent for purposes of facilitating the issuance of (1) IRS individual taxpayer identification numbers (ITINs) to alien individuals who are ineligible to obtain Social Security Numbers (SSNs), or (2) employer identification numbers (EINs) to foreign persons.

What is an Acceptance Agent and what is its role?

Any “eligible” person may apply to become an Acceptance Agent or a Certifying Acceptance Agent. (See “Who may apply to become an Acceptance Agent?” later).

An Acceptance Agent (AA) is a person (i.e. an individual or an entity) who, pursuant to a written Agreement with the Internal Revenue Service, is authorized to assist alien individuals and other foreign persons who are ineligible or unable to receive a Social Security Number, in obtaining ITINs from the IRS.

The AA facilitates the application process and the issuance of taxpayer identification numbers to alien individuals and other foreign persons. An Acceptance

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Agent performs this duty by reviewing the required documents and forwarding the completed Form W-7 (with required documentation) and a valid U.S. Federal income tax return, to the address listed in the instructions to the Form W-7, or to obtain EINs by following one of the procedures described in the Form SS-4 instructions.

The AA assists the IRS in processing applications and reducing rejects for missing/incomplete information, by ensuring that the applications are complete, accurate and legible. An Acceptance Agent does not receive the assigned ITIN directly from the IRS. That information is sent directly to the W-7 applicant.

A person acting as an Acceptance Agent does not act as an Agent of the IRS, nor is the person authorized to hold itself out as an Agent of the IRS. The role of an AA is to facilitate the application process and the issuance of taxpayer identification numbers to alien individuals and other foreign persons who require an identification number for tax purposes only.

A Certifying Acceptance Agent (CAA ) is a person (i.e. an individual or an entity) who, pursuant to a written Agreement with the Internal Revenue Service, is authorized to assist alien individuals and other foreign persons, who are ineligible or unable to receive a Social Security Number, in obtaining ITINs from the IRS. In addition, a CAA is also authorized to submit a Form W-7 that has been properly executed in accordance with the Signature Requirements on behalf of an applicant, with a copy of documents that support foreign status and Identity, except for foreign military identification card. The CAA must agree to maintain a record of such documentation for the period described in the Acceptance Agreement.

The CAA facilitates the application process and the issuance of taxpayer identification numbers to alien individuals and other foreign persons. A CAA performs this duty by reviewing the required documents and forwarding the completed Form W-7 with a copy of documents for primary and secondary taxpayers, except for foreign military identification card. For dependents, CAAs can only authenticate passports and birth certificates. All other forms of documentation submitted for dependents must be original or certified copies from the issuing agency. If required for certain dependents, the CAA must also submit original documentation as proof of U.S. residency (i.e. school records, medical records, etc.). CAAs must also submit the U.S. federal income tax return or Form SS-4 to the IRS, along with a Certificate of Accuracy (Form W-7(COA), (attaching any supplementary

statements required). The Certificate of Accuracy substantiates the ITIN applicant’s claim of identity and foreign status, describes the documentation on which it is relying, and verifies the authenticity, accuracy and completeness of the supporting documentation, except for foreign military identification card. In addition, once the ITIN is issued, the CAA receives the applicant’s number directly from IRS. A person acting as a CAA does not act as an agent of the IRS, nor is it authorized to hold itself out as an agent of the IRS.

What is the difference between a “responsible party” and “primary/alternate contact”?

The responsible party is the individual who has the authority to sign the Forms W-7 on behalf of the principal, partner or owner of the business (if they are not the same individual). This person will be the official point of contact with the IRS and will be responsible for ensuring that all requirements of the Acceptance Agent Program are followed. Only an approved CAA responsible party may sign Form W-7(COA).

Each office may submit the names of ten (10) individuals to act as the responsible party.

The primary and alternate contacts (if different than the responsible party(s)) are individuals who have been authorized by the Acceptance Agent business to handle submissions of Forms W-7 and contact ITIN Operations to inquire about the status of Forms W-7. Each AA office may have one primary and one alternate contact. They are not permitted to sign Form W-7(COA).

Who may apply to become an Acceptance Agent?

An eligible individual or entity can apply to become an Acceptance Agent and include any of the following:

1. Persons that provide assistance to taxpayers in the preparation of their tax returns.
2. A college or university that is an educational organization.
3. A state or federal government agency.
4. A financial institution.
5. A community-based organization.
6. A Partnership, Corporation or LLC.
7. Any other person or categories of persons who are involved in providing tax related services and who may be authorized under IRS Regulations or Procedures.

What are the Background Check Requirements?

Each individual listed as a responsible party of the business

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must have attained the age of 18 as of the date of their application. If the responsible party is an attorney, CPA or enrolled agent, but not a certified Electronic Return Originator (ERO), evidence of U.S. professional status must be submitted. The following persons are exempt from the background check requirement: a financial institution within the meaning of I.R.C.265(b)(5) or Treasury Regulations 1.165-12(c)(1)(iv), a college or university that qualifies as an educational organization under Treasury Regulations 1.501(c)(3)-l(d)(3)(i), a casino, Federal Agencies as defined in IRC 6402(h), an ERO in good standing with the IRS, and foreign nationals without a Social Security Number (SSN) residing outside the United States. (Evidence of your professional status may be obtained by contacting the issuing authority.)

Note : If the responsible party of the business changes, the business must submit an amended application. Your application will not be processed if you do not provide evidence of professional status and the electronic signature of both the responsible party(s) and the principal, partner or owner of the business.

What is a suitability check?

Both the business and the responsible party(s)will be required to submit to a suitability check before being authorized to act as an Acceptance Agent. A suitability check can include the following:

1. An IRS review of the business’ tax filing history to determine if it is in full compliance with filing and payment responsibilities under the Internal Revenue Code and its Regulations.
2. A credit history check.
3. A background check.

Providing false or misleading information on the AA application is a criminal offense that may result in prosecution and criminal penalties.

For exceptions to the suitability check, refer to Rev. Proc. 2006-10, Section 6.

What are the PTIN requirements for Responsible Parties?

A Preparer Tax Identification Number (PTIN) must be obtained by all Responsible Parties who are Enrolled Agents, as well as those who are tax return preparers who are compensated for preparing, or assisting in the preparation of, all or substantially all of any U.S. federal

tax return. Refer to www.IRS.gov/ptin for more information. If applicable, a valid, current PTIN must be provided on the application.

Note : Exceptions to the PTIN requirement include financial or educational institutions, gaming industry, Low Income Taxpayer Clinics (LITC) and Volunteer Income Tax Assistance (VITA) sites provided they are not paid preparers.

How do I apply to become an Acceptance Agent?

Interested parties may apply year around for participation in the IRS Acceptance Agent Program. All new and renewing qualified person(s) (individual or entity) wishing to become an Acceptance Agent must:

1. Complete the mandatory ITIN Acceptance Agent training at IRS.gov before submitting their application. The training is available at ITIN Acceptance Agent Program. Click on the link entitled ITIN Acceptance Agent Training. Everyone who is listed as a Responsible Party (RP) on the Acceptance Agent application must complete the training.
2. Complete Forensic Document Identification Training (CAAs only). For more information, see https://www.irs.gov/forensic. Everyone who is listed as a Responsible Party on the Acceptance Agent application must complete the training.
3. Complete the electronic IRS Acceptance Agent Application on e-Services. Identify individuals in the firm/organization as the Principal, Partner, or Owner of the Business (PPO); Principal Consent (PC); RPs; and Contacts, as needed. All parties identified on your application, excluding contacts, must register with IRS e-Services to access the application, complete required fields, acknowledge training completion, and sign respective jurats. After you log into e-Services, for guidance on how to complete the application, click the online tutorials tab at the top of the page to access our Acceptance Agent Application tutorial. If your business location is abroad, contact ITINProgramOffice@irs.gov for information on how to submit your application.
4. Access the CAA Document Upload Tool at IRS.gov/ caaReply to upload any required documentation (i.e., Forensic Training Certificates, Professional Credentials, Citizenship documents, Exempt Status letter). Do not upload an application through the CAA Document Upload Tool.

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Who may sign the Acceptance Agent application?

There must be two signatures on the Application. The signature of the principal, partner or owner of the business that is applying for Acceptance Agent status, and the signature of the individual who is applying to become the “responsible party” of the business. If you are not sure who the principal, partner or owner is, the following definitions will assist you.

The Principal, Partner or Owner of the business is defined as follows:

For entities with shares of interests traded on a public exchange, or which are registered with the Securities and Exchange Commission, that individual is (a) the “principal” officer if the business is a corporation, (b) a general “partner”, if a partnership, (c) the “owner” of an entity that is disregarded as separate from its owner, or (d) a grantor, owner or trustor, if a trust. For all other entities, it is the person who has a level of control over, or entitlement to, the funds or assets in the entity that, as a practical matter, enables the individual, directly or indirectly, to control, manage or direct the entity and the disposition of its funds and assets.

When will the IRS approve the Applicant’s acceptance into the program?

The IRS will determine whether the Applicant qualifies to become an Acceptance Agent and will notify it in writing of this determination upon:

1. Completion of a review of the application;
2. A review of any additional information requested; and
3. Completion of a suitability check.

This process can take up to 60 days (two months).

What is an Acceptance Agent Agreement?

An Acceptance Agent Agreement described under Section 301.6109-1(d)(3)(iv)(A) of the U.S. Treasury Regulations is an Agreement between the IRS and a person authorized by virtue of the Agreement to act as an Acceptance Agent on behalf of an alien individual or other foreign person who needs to obtain an ITIN or EIN. The Commissioner of the Wage and Investment Division or his designee shall sign the agreement on behalf of the IRS. If the Acceptance Agent is a person other than “an individual”, (i.e. bank, partnership, etc.) the Agreement must be signed by the principal, partner or owner of the business. The Acceptance Agent Agreement stipulates the terms and procedures to be followed by the IRS

and the AA/CAA to ensure proper administration of the process by which the IRS issues TINs to alien individuals and foreign persons.

The terms of a Certifying Acceptance Agent Agreement will include

1. An agreement to verify documentation in support

of the applicant’s claim of “identity” and “foreign status”. 2. An agreement to maintain certain records. 3. An agreement to submit certain information to the

IRS upon request; and 4. An agreement to complete a Certificate of Accuracy,

Form W-7(COA).

What is an Office Code?

An office code is a number that has been assigned to you by the ITIN Policy Section once your application for acceptance agent status has been approved. This assigned number corresponds to the address that you provided for each office location listed on your application. By entering the correct office code, you will ensure that the appropriate mailing address is used for IRS correspondence. The office code field is found in the “Acceptance Agent’s Use only” portion of Form W-7. If you are assigned a new EFIN (Electronic Filing Identification Number) through the IRS E-Filing Program, you must notify the ITIN Policy Office of the change. We will assign you a new office code based on your new EFIN. If you use your new EFIN prior to the information being revised in our Acceptance Agent database, your Forms W-7 will reject.

When will the Acceptance Agent Agreement expire?

Acceptance Agent Agreements remain in effect through December 31st of the fourth calendar year after approval. Thereafter the agreement is expired. To avoid a lapse in status, Acceptance Agents must submit a renewal application at least six months prior to the expiration of their Agreement to retain their Acceptance Agent status. It can take up to 60 days from the time that you submit your application to receive your approved Acceptance Agent Agreement from IRS.

Can an Acceptance Agent Agreement be terminated?

Yes, an Acceptance Agent Agreement can be terminated at any time. In general, either the Acceptance Agent or the IRS may terminate an Agreement after delivery of notice of termination to the other party. The decision to terminate is solely at the discretion of the party

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giving such notice. IRS will not generally terminate an Agreement, unless:

1. The Acceptance Agent willfully fails to comply with the procedures required by the Agreement (including failing to exercise due diligence) and such failure constitutes material non-compliance;
2. The Acceptance Agent has misrepresented material information given on its application to become an Acceptance Agent or on a TIN application;
3. The Acceptance Agent accepts a TIN application with knowledge that the material information on the form is false.
4. The Acceptance Agent fails to submit at least 5 W-7 applications within a calendar year (Jan. 1 - Dec. 31).
5. The Acceptance Agent fails to satisfy an acceptable “suspense” and “reject” processing rate on Form W-7 submissions.
6. The CAA fails to permit or cooperate with investigations or compliance checks by IRS, or audits conducted by the Treasury Inspector General for Tax Administration (TIGTA) and/or the Government Accountability Office (GAO).

What are the procedures for maintaining and providing TIN application forms?

An Acceptance Agent shall agree to maintain a supply of the most current version of IRS Forms W-7 for obtaining ITINs, and Forms SS-4 for obtaining EINs from the IRS. If the Acceptance Agent wishes to use a substitute form, approval must first be obtained through IRS. For example, if the Acceptance Agent is a financial institution, the Form W-7 or Form SS-4 may be incorporated as part of an account-opening package. (See “Who do I contact if I want to have a substitute form approved?” later in this publication).

What are the submission requirements that must be met by Acceptance Agents?

Both AAs and CAAs must satisfy submission requirements to remain in the Acceptance Agent Program. Submitting less than five Form W-7 Applications during a calendar year will result in suspension from the program. Once removed from the program for inactivity, the AA/CAA must remain out of the program for one year before they can submit a new Acceptance Agent Application to reapply.

What are the procedures for assisting applicants with the completion of their Form W-7?

An Acceptance Agent will assist in the preparation of the Form W-7 (Application for IRS Individual Taxpayer Identification Number). For example, the Acceptance Agent should make certain that every item included on the application form has been completed and should assist the applicant in understanding the information required by the application form. In addition, if there are any questions that the Agent cannot reasonably answer about the forms, application process, requirements, etc., the Agent should contact the IRS for a reply. Questions regarding these matters should be directed to the IRS at:

1-800-829-1040 (Inside the continental United States)

1-267-941-1000 (Outside of the United States only)

What is a “Certificate of Accuracy”?

A “Certificate of Accuracy” Form W-7 (COA) is prepared by the CAA once the supporting documentation has been reviewed and accepted. A Form W-7(COA) must be completed for each W-7 application submitted. The COA is a certification by the CAA that they have reviewed supporting documents that prove the ITIN applicant’s identity and foreign status and to the best of their knowledge the information submitted is authentic and accurate. Only a responsible party of the business is authorized to sign Form W-7(COA). Form W-7(COA) must:

1. Include the type(s) of documentation reviewed,
2. Verify the authenticity, accuracy and completeness of the supporting documentation,
3. Contain the name title signature and PTIN (if applicable) of the individual(s) named as the responsible party, and
4. Display the date the Form W-7(COA) was signed.

Ensure the information is legible and complete.

To ensure that you are providing all of the required information, refer to the “Certificate of Accuracy” in Exhibit F at the end of this Publication. A W-7(COA) must be completed for each W-7 application submitted.

Note: The Certificate of Accuracy does not replace the requirement to send copies of documents to the IRS that prove foreign status and identity. For dependents, CAAs can only authenticate passports and birth certificates, and must submit copies of the documents with Form W-7(COA). If the passport is submitted as a stand-alone document for a dependent, the date of entry into the United States must be shown on the passport submitted to the IRS. Any supplemental documentation supporting an Exception, (i.e. a copy of a withholding document, a letter from a financial institution, a denial letter from the Social Security Administration, a letter from the University’s Designated School Official, Responsible Officer or Authorized Official), must also be attached to

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the Form W-7. Copies of the partnership agreement showing the organization’s name, EIN and the name of the foreign partner’s name as a participant in a foreign or U.S. partnership must be attached. This is required even though the partnership agreement is reviewed by the CAA and the information included on the Form W-7(COA). Refer to Exhibit K for a checklist of all the requirements.

What are the procedures for submitting ITIN application forms?

An Acceptance Agent (AA) shall promptly submit to the IRS the completed Form W-7 applications. The Form W-7 must be submitted with a valid U.S. federal income tax return (unless an exception to the tax return filing requirement is met) and the documentation supporting the taxpayer’s claim of foreign status and identity.

A Certifying Acceptance Agent (CAA) will submit to the IRS a Form W-7 and the U.S. federal income tax return (if applicable), and copies of supporting documentary evidence. Additionally, the CAA attaches a “Certificate of Accuracy” (Form W-7(COA)) to certify that it has reviewed the appropriate documentation evidencing the applicant’s identity and foreign status, it has maintained a record of the documentation and that it certifies to the best of its knowledge and belief the documentation is authentic, complete and accurate. As part of the certification, the CAA must describe the documentation upon which it has relied. The certification is not binding on the IRS who may, in certain cases, request to see appropriate documentation before issuing the ITIN.

REMINDER: Both the AA and CAA will still need to submit a letter from the Social Security Administration (if applicable) denying the individual’s request for a Social Security Number if the applicant has been issued a visa that is valid for work.

In cases where a student who is issued a “F”, “J’, or “M” visa will not be working while present in the U.S., and is here only for the purpose of study, a letter from the Designated School Official, (DSO) or Responsible Officer, (RO) stating that the taxpayer will not be securing employment or receiving income from personal services while in the U.S., will suffice.

What happens after I submit Form W-7?

Allow 7 weeks for the IRS to notify you of your ITIN application status (9 to 11 weeks if you submit the application during peak processing periods (January 15 through April 30) or if you’re filing from overseas).

Following the processing period, a notice will be issued to the taxpayer and you (CAA only) advising of the status of the submitted Form W-7. Notices should be kept with your client’s file for the full 3-year retention period. A CP 565,

ITIN Assignment Notice will be issued if the submitted Form W-7 was complete, and all required documentation was provided. If the Form W-7 wasn’t complete or lacked required documentation, you’ll receive a CP 566, ITIN Suspense notice requesting additional information, or a CP 567, ITIN Reject notice advising you to submit a new Form W-7. Follow all the instructions in the notice(s). See Exhibit H – Notices and Correspondence for more information.

What should I do if I have not received the client’s ITIN by the end of the 7 week period? If you have still not heard from the IRS 7 or more weeks after your submission of Form W-7 and attached documents, follow the procedures listed below to obtain the status. These instructions may be enough to provide you with the information you need.

1. You should check with your client to determine if they have received an ITIN Assignment Letter or Notice from the IRS. You should make sure that you or your client responds to any letter/notice that you receive from the IRS for missing information, missing documentation, etc. When sending in the requested information/documentation, be sure to include a copy of the notice you received.
2. If you or your client did not receive a letter/notice from IRS or if you need assistance with the notice or if it has been over 7 weeks and you have not heard anything from the IRS, you should call 1-800-8291040 within the continental U.S., or 1-267-941-1000 if calling from outside the U.S (not a toll-free number). This will enable you to find out the status of your W-7 and the attached U.S. Federal income tax return(s), if applicable.
3. If your client moves before they receive their ITIN, they also should call 1-800-829-1040 within the continental U.S., or 1-267-941-1000 if calling from outside the U.S (not a toll-free number) and include their previous and current addresses. Note: Acceptance Agents and Certifying Acceptance Agents must initially follow the same procedures as all other applicants.

What are the procedures for assisting taxpayers with notification procedures in the event of a change of alien status?

An alien individual may become eligible to obtain a SSN, for example, if the individual becomes a U.S. citizen, a permanent U.S. resident or is lawfully permitted by USCIS (United States Customs and Immigration Services) to work in the United States.

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If an Acceptance Agent has a continuing business relationship with an individual and knows that the individual assigned an ITIN has become eligible to obtain, or has obtained, a Social Security Number, the Agent shall inform the individual of the obligation to:

1. Apply for a SSN;
2. Discontinue use of the previously issued ITIN and

immediately use the SSN for all future filing purposes; and 3. Notify the IRS of the change in alien status, i.e. the

individual becomes a U.S. Citizen or permanent U.S. resident (i.e. “green card” holder). The notification to the IRS must be in writing and should:

1. State that the individual is either eligible to obtain or

already has obtained a SSN; 2. Include the individual’s legal name, street address,

city, state, country, zip code, previously assigned ITIN, the new SSN (if applicable), the current date, and signature of the individual; and 3. Be mailed to the IRS by mail at the following address

Internal Revenue Service ITIN Operations P.O. Box 149342 Austin, TX 78714-9342 or if using an overnight private service:

Internal Revenue Service ITIN Operations Mail Stop 6090-AUSC 3651 S. Interregional, Hwy 35 Austin, TX 78741-0000

What are the procedures for IRS communication?

The applicant’s signature on the Form W-7 authorizes the Acceptance Agent to communicate with the IRS regarding that particular application.

To discuss any other information with the IRS, or to discuss an EIN application, your client must submit a Power of Attorney by filing Form 2848 (Power of Attorney and Declaration of Representative) or Form 8821 (Tax Information Authorization), with the Internal Revenue Service. The POA or Tax Information Authorization must clearly state the purpose for which it is intended. See the instructions for Form 2848 and/or Form 8821 to determine which form to file. All POAs must be submitted in English. POAs received by IRS in a foreign language will be considered invalid, unless accompanied by a certified English translation.