CAA IRS ITIN Application Process 4 — Questions and Answers
Question 1: Which ITIN exception applies when the applicant has third-party withholding on passive income such as interest or dividends?
- Exception 1 (Correct answer)
- Exception 2
- Exception 3
- Exception 4
Correct answer: Exception 1
Exception 1 covers third-party withholding on passive income.
Question 2: An applicant needing an ITIN for a home mortgage loan with third-party reporting of mortgage interest falls under which exception?
- Exception 1
- Exception 5
- Exception 4
- Exception 3 (Correct answer)
Correct answer: Exception 3
Exception 3 covers third-party reporting of mortgage interest.
Question 3: A foreign person selling U.S. real property subject to FIRPTA withholding would generally claim which exception?
- Exception 2
- Exception 4 (Correct answer)
- Exception 3
- Exception 5
Correct answer: Exception 4
Exception 4 covers third-party withholding on the disposition of a U.S. real property interest.
Question 4: Exception 2 covers which general category of situations?
- Wages, scholarships, fellowships, and gambling winnings (Correct answer)
- Mortgage interest reporting
- Real property dispositions
- Passive income from partnerships
Correct answer: Wages, scholarships, fellowships, and gambling winnings
Exception 2 covers wages, salary, compensation, scholarships, fellowships, grants, and gambling winnings.
Question 5: When an applicant qualifies for an exception, what is generally submitted instead of a federal tax return?
- Nothing; the W-7 alone suffices
- A Form 1040-X
- Documentation supporting the exception (Correct answer)
- A letter from the CAA
Correct answer: Documentation supporting the exception
Exception applicants attach documentation supporting the exception in place of a tax return.
Question 6: Exception 5 relates to which situation?
- Gambling winnings
- Reporting obligations under Treasury Decision 9363 (Correct answer)
- Student scholarships
- Mortgage interest
Correct answer: Reporting obligations under Treasury Decision 9363
Exception 5 relates to reporting obligations under TD 9363.
Question 7: Absent an exception, a first-time ITIN application must be submitted with what?
- A Social Security denial letter
- A U.S. bank statement
- A Form W-2 from a U.S. employer
- A valid federal income tax return (Correct answer)
Correct answer: A valid federal income tax return
Unless an exception applies, the W-7 must be attached to a valid federal income tax return.
CAA IRS ITIN Application Process 4
Which ITIN exception applies when the applicant has third-party withholding on passive income such as interest or dividends?