[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