W7 rejected for minor son of Canadian citizen filing 1040NR

deepu134 · Post by **deepu134** » Sat Jan 16, 2016 3:50 pm

I have IRA and Roth IRA accounts in the US from the time I worked there befor moving to Canada in 2007 as a landed immigrant. I am now a Canadian citizen.

In 2014, I took out a distribution from my IRA. In 2015, I filed my 1040NR for 2014 and claimed my minor son as a dependent. IRS rejected that claim and asked me to file for an ITIN for my son.

As a Canadian citizen, I do not need a US visa to visit the US. I did have a US B1 visa on my Indian passport when I was still a landed immigran in Canada. This B1 visa is still valid though I am no longer an Indian citizen and do not have a valid Indian passport.

Late last year, I submitted a duly filled W7 application for my son wwith my son's passport copy certified by an IRS-certified acceptance agent (CAA). Other supporting documents included a copy of my 2014 US 1040NR (marked as COPY) and the W-7 (COA) signed by the acceptance agent to the IRS office in Austin. On the W7, I filled out box h. I worded the explanation describing the ITIN applicant (my son) as a "non-resident alien eligible to be claimed as a dependent but ineligible for an SSN").

IRS rejected this W7 application stating '*) you applied for an ITIN for a non-federal tax related purpose, and *) you didn't provide an exception number or correct information in check box h. I called the IRS, and was told that the real notation on my file was that "CAA needs to provide original CCIA (Copies Certified by the Issuing Agency?) documents for dependents" She also reeled out a bunch of rejection codes and I am not sure if I got them all - R10. R19, S02, S03, S26.

I am at a loss here. This ITIN is for a tax-related purpose. My son's passport copy was certified by a CAA, in accordance with W7 instructions. From their instructions for W7, it appears that copies may be certified by their consulates or CAAs, and are not limited to the Issuing Agency, Passport Canada.

a) Should I resubmit and use a different check box? Would it be accurate to claim that I still have a US visa nd check box g instead? Or should I check both box g and h?

Thanks so much for your feedback!

nelsona · Post by **nelsona** » Sat Jan 16, 2016 4:12 pm

Why bother. Any tax you save with an exemption will simply be taken by CRA when yo ureduce the US tax.

Most in your position simply pay the 15% flat tax withheld and do not file a 1040NR.

I'll let you and your certifying agent figure it out.

Search for ITIN for some threads on this.

deepu134 · Post by **deepu134** » Sat Jan 16, 2016 4:28 pm

Thanks nelsona. I am starting to think that way too. It was easy to be approved for an ITIN for my spouse in the past, and with IRS folks finding all kind of silly reasons to deny ITINs, I am much better off adjusting my Canadian tax return.

What is the conversion rate to use to claim credit for US taxes on my Canadian ta return? Is there a particular date (say filing date) that we use the rates for? With the Canadian dollar heading downhill as it is, I'd want to use the best possible exchange rate that works out in my favour.

Thanks again!