Using ITIN to Open an Account

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Question:

Recently in dealing with a non-resident alien, an ITIN was presented at the time of account opening. After researching on the irs.gov website and calling the IRS, I was told that an ITIN can only be used to file a US tax return. It is not to be used for any other purpose, including opening a bank account. In your question and answer page about non-resident aliens it mentions and ITIN can be used . Please clarify.

Answer:

I'm not certain what Q&A page you are speaking of, but I suggest that you go back to your IRS source and ask for a clarification. First, you can open an account for a non U.S. person with no TIN at all, so you can certainly open one with an ITIN.

Second, IRS Publication 1220 sets out the rules for information reporting. In field position 11 of the B Record, it asks the filer to identify the type of TIN. The instructions very clearly indicate an ITIN is acceptable for information reporting:

This field is used to identify the Taxpayer Identification Number (TIN) in positions 12-20 as either an Employer Identification Number (EIN), a Social Security Number (SSN), an Individual Taxpayer Identification Number (ITIN) or an Adoption Taxpayer Identification Number (ATIN).

Enter the appropriate code from the following table:

Code Type of TIN Type of Account 1 EIN A business, organization, some sole proprietors, or
other entity 2 SSN An individual, including some sole proprietors 2 ITIN An individual required to
have a taxpayer identification
number, but who is not
eligible to obtain an SSN 2 ATIN An adopted individual prior
to the assignment of a social
security number Blank N/A If the type of TIN is not
determinable, enter a blank.

Third, the instructions to the CTR & SAR clearly indicate an ITIN is acceptable.

First published on BankersOnline.com 7/12/10