I listened to Mary Beth Guard and Ken Golliher's foreign-born persons recorded webinar yesterday. My credit union is trying to determine how to identify resident vs non-resident aliens at account opening. Ken's materials stated that non-resident aliens may have restricted SSNs. When would this occur? It seems that if a resident alien is identified by a 1) permanent resident card, or 2) the substantial presence test, that if the person is in the US for an extended period of time with an SSN that they would meet the substantial presence test and therefore be a resident alien? Can the assignment of an SSN be used to assume the person is a resident alien and not a non-resident alien?

The last manual was from 2014 and a word search doesn't turn up the word "restricted" in the portion related to identifying numbers. You may have misread something.

A non resident alien, who has permission to work in the United States, may have an SSN. The card will say "NOT VALID FOR EMPLOYMENT or similar language.

A resident alien has a right to be in the U.S. and will have an SSN. He or she will have a "green card." (That's how you tell the difference between a resident alien and any other foreign born person.)

The "substantial presence test" is a Catch 22 regarding income tax status; the materials encourage financial institution personnel not to attempt to apply it. It is about becoming a U.S. person for income tax purposes. It has nothing to do with becoming a resident alien.

From the Q & A on page 8:

Does the fact that a person has an SSN indicate that he is a U.S. Citizen? Resident alien? Non resident alien?

No. No. No. Possession of a valid SSN is not an indicator of legal status; each of the above may have an SSN.

Thank you for moving the topic to Operations. When I used the term restricted social security card, I meant to refer to a card with the language that you mentioned. So if SSNs are not an indicator of status, is the permanent resident card the only way to verify resident vs non-resident alien? How are financial institutions determining status to properly track non-resident aliens? Do they specifically ask the applicant what his or her status is?

After the bank performs CIP, it has an identifying number for the individual. If it's foreign, you know he or she is not a U.S. citizen. Ironically, if it's a U.S. TIN, the individual's status is ambiguous.

You must ask.

In my opinion, the most important due diligence question is "In what country are you a citizen?" If the person is a citizen of a foreign country, but a legal resident of the U.S. you will know that because, as stated above, he or she has a green card. Without a green card, a citizen of a foreign country is a non resident alien in the U.S..

TIN compliance is like 3 dimensional chess; you must be able to see and contemplate multiple boards at the same time; i.e. the Bank Secrecy Act, the Internal Revenue Code, and a tiny piece of the U.S. laws relating to citizenship.

One byproduct of TIN compliance is your institution's ability to identify (produce a list if requested) your "non resident aliens and foreign individuals." That includes resident aliens and non resident aliens.