Amending prior years (filed with ITIN) after obtaining SS#.

[Jack from Ohio]

Client and spouse have filed jointly the past 5 years. He used ITIN for all those filing years.

He filed the necessary paperwork and is now (2013) getting a SS#. He should receive it in the next 30-60 days.

After he receives his SS#, can they amend prior years to take advantage of EIC that has been denied due to his ITIN?

I have found several sources on the internet that say they have successfully done this, but cannot find any documentation or substantiation on the IRS site.

Anyone have experience in this area? Just want to be sure before I take this on.

[Lion EA]

Remember years ago at Block they told us to amend...

[ILLMAS]

PM sent

[Max W]

The IRS has a procedure to make sure that all the TP's records come under the SSN.

http://www.irs.gov/Individuals/Additional-ITIN-Information

Scroll down to - What do I do when I am assigned a social security number (SSN)?

this should eliminate any possibility of rejection of the X returns

[bertrans]

You may amend every return on which there is an open refund statute of limitations.

[Jack from Ohio]

You may amend every return on which there is an open refund statute of limitations.

Could you give me a source of your information? I am unable to find anything from IRS about this.

[jainen]

>>I am unable to find anything from IRS about this.<<

Pub 596 is written in very simple terms, so it doesn't carry much weight. But it does quite clearly explain that if you don't have an SSN, you can still get EIC later. "If you get the new card after you have already filed your return, you can file an amended return on Form 1040X, Amended U.S. Individual Income Tax Return, to claim the EIC. "

This assumes, of course, that you are eligible for an SSN, so it's really only talking about the current year. I don't know how the IRS would look at prior years, because an ITIN is only supposed to be used by people not eligible for an SSN.

[Jack from Ohio]

>>I am unable to find anything from IRS about this.<<

Pub 596 is written in very simple terms, so it doesn't carry much weight. But it does quite clearly explain that if you don't have an SSN, you can still get EIC later. "If you get the new card after you have already filed your return, you can file an amended return on Form 1040X, Amended U.S. Individual Income Tax Return, to claim the EIC. "

This assumes, of course, that you are eligible for an SSN, so it's really only talking about the current year. I don't know how the IRS would look at prior years, because an ITIN is only supposed to be used by people not eligible for an SSN.

This is exactly the only guidance I have found. Talked to a preparer that deals with these situations and he proposed that the process for obtaining the SS# entails statements that the person has not been working under a different number. Therefore, it becomes a bit of a law issue.

I have also read posts by preparers in other venues saying they have successfully filed the prior returns. Successfully filing does not mean they were in accordance with laws or tax code. The IRS has so many cracks that people fall through that it is almost comical.

With the recent increase in preparer scrutiny about "knowing" or "should have known" I want to be sure of the legality, tax code wise, before I embark on this journey.

[Lion EA]

Years ago when I worked for HRB, they told us to amend prior years for EIC and anything else when a client came in with a new SSN after using an ITIN in the past. At the time, I trusted their legal department to advise us correctly. SInce I've been on my own, I've not had that situation so haven't researched myself.

[Pacun]

Since 1040Xs are carefully reviewed by the IRS, why don't you test the waters by amending one year?

[jainen]

>>I want to be sure of the legality, tax code wise,<<

With all the screwball ideas we suggest on this forum, why stumble on reporting a Social Security number? Well don't worry--if you get caught we'll all send e-mails to the judge!

[Jack from Ohio]

Since 1040Xs are carefully reviewed by the IRS, why don't you test the waters by amending one year?

No difference per Circular 230 if it is one or ten. That is why I hesitate.

[gianni1212]

i did this before for a client and it was really easy. Just fill out 1040 x with social and changes, and write in explanation field: "ammending return with SSN to claim EIC."

[Jack from Ohio]

I received information this morning that confirms the ability to amend prior returns that are still within the statute of limitation for receiving refunds. It was a 4 page document and there are many caveats to the right to amend prior.

In my case, the client was issued an ITIN in 2006, so he was filing legally. It is not a simple yes and no answer, just the same as most IRS issues.

There are caveats concerning prior actions, legally working in the US, etc., so do not take this as a direct yes.

[joelcont]

i did this before for a client and it was really easy. Just fill out 1040 x with social and changes, and write in explanation field: "ammending return with SSN to claim EIC."

Same here, its VERY common here.

9 out of 10 receive their refund.

[Chowdahead]

There is a question on the 8867 I believe that asked if the person was a Non-Resident Alien for any part of the year. if you check yes, that will disqualify the person for the EIC I believe.

Sine the person was here illegally (or without Permanant Residence Status) during those years, I think they may be considered a "Non-Resident Alien" for those years before they had a Permanant Residence Card and hence an SSN issued to to them.

So essentially you would have to check "No" in that box in order for the EIC to calculate.

[bertrans]

The comments here are quite germane; the analysis, as usual in tax law, is the result of combining various IRS statements about identifying numbers (section 7701, throughout, in particular.) Once the general principle of amending after receipt of a valid SSN is accepted, then, it follows necessarily that other years with open refund statutes may also be amended (provided that the dependent meets certain other conditions.) What I find, on the other hand, quite frankly depressing, is the argument made by some of my clients to the effect that a marriage license is retroactive........Takes all kinds.

[Chowdahead]

The comments here are quite germane; the analysis, as usual in tax law, is the result of combining various IRS statements about identifying numbers (section 7701, throughout, in particular.) Once the general principle of amending after receipt of a valid SSN is accepted, then, it follows necessarily that other years with open refund statutes may also be amended (provided that the dependent meets certain other conditions.) What I find, on the other hand, quite frankly depressing, is the argument made by some of my clients to the effect that a marriage license is retroactive........Takes all kinds.

However, if the taxpayer was a "Non-Resident Alien" in that tax year, then they do not qualify for the EIC according to the 8867.

Yet I heard a woman on local Spanish-Language radio here the other day openly saying that this is possible and people are leaving money that is theirs on the table. So this is being discussed even on the airwaves.

I just don't know how that question regarding Non-Resident Statis can be ignored. The question posed is not asking about the client's status at the time of completing the 8867; it's asking what the person's status was during the actual Tax Year being filed.

[bertrans]

However, if the taxpayer was a "Non-Resident Alien" in that tax year, then they do not qualify for the EIC according to the 8867.

[emphasis added.]

Yet I heard a woman on local Spanish-Language radio here the other day openly saying that this is possible and people are leaving money that is theirs on the table. So this is being discussed even on the airwaves.

I just don't know how that question regarding Non-Resident Statis can be ignored. The question posed is not asking about the client's status at the time of completing the 8867; it's asking what the person's status was during the actual Tax Year being filed.

This was covered in my post: if the potential qualifying child meets all of the other criteria.

[jainen]

>>the person was here illegally... they may be considered a "Non-Resident Alien" for those years before they had a Permanant Residence Card<<

No, that is absolutely wrong! Pub 519 says, "You are a resident alien of the United States for tax purposes if you meet either the green card test or the substantial presence test."

[ILLMAS]

Who remembers this court case? Taxpayer did not have substantial information at the time of filing, I wonder if subtantial information means having a SSN, authorized to work etc... during the tax year.

[jainen]

>>Taxpayer did not have substantial information<<

The word there was "substantiation," not "substantial." That's from an unrelated section of the tax code, which requires specific documentation of charity prior to filing. The "substantial presence" test means that EVERYBODY who lives in the U.S. is subject to the whole tax code.

[ILLMAS]

>>Taxpayer did not have substantial information<<

The word there was "substantiation," not "substantial." That's from an unrelated section of the tax code, which requires specific documentation of charity prior to filing. The "substantial presence" test means that EVERYBODY who lives in the U.S. is subject to the whole tax code.

Did you get a chance to see the PM I sent you?

[jainen]

>>see the PM I sent you<<

Thank you. I never use private messages in this forum. Put it all up for everyone to see and comment.

[Eva McRae]

The answer is on the 1040X instructions. "If you didn't have a social security number (an SSN) by the due date of your return for the tax year being amended (including extensions), you can't claim the EIC on your amended return, even if you later get an SSN. Also, if a child didn't have an SSN by the due date of your return for the tax year being amended (including extensions), you can't count that child as a qualifying child in figuring the EIC on your amended return, even if that child later gets an SSN. See the instructions for lines 66a and 66b.