To meet U.S. tax compliance requirements, foreign individuals and entities should obtain the appropriate tax identification numbers. Let us separately understand these tax identification numbers for individuals and businesses.
Foreign individuals who cannot obtain a Social Security Number but have US tax filing obligations should apply for an ITIN using Form W-7. ITINs may also be required for foreign persons claiming treaty benefits, filing US tax returns, or being claimed as dependents on US tax returns.
The application may require original documentation or certified copies from issuing agencies to verify identity and foreign status.
ITINs should be renewed every five years if they are not used on a tax return for three consecutive years, or if they contain middle digits 70-88, 90-92, or 94-99.
Spouses and dependents of foreign individuals may also need ITINs, even if they don’t have filing requirements.
Foreign businesses operating in the US should obtain an Employer Identification Number (EIN) by filing Form SS-4 with the IRS. EINs are required for foreign corporations filing Form 1120-F, foreign partnerships with US operations, and foreign LLCs conducting business in the US. Single-member foreign LLCs may need EINs depending on their US activities and elections.
Foreign businesses can apply for EINs by phone, fax, or mail (online application is only available to companies with US addresses). Third-party designees can obtain EINs on behalf of foreign entities with proper authorization via Form 2848 (Power of Attorney).
For more detailed information on the process of obtaining EINs, please refer to the following link.