This week, United States Senator Ben Ray Luján (D-New Mexico) joined a group of colleagues in the Senate in making a request to the Commissioner of the Internal Revenue Service (IRS), Charles Rettig, to extend the filing deadline for taxpayers who have individual taxpayer identification numbers (ITIN) and who have been impacted by massive processing delays at the agency.
As a result of these operational difficulties, a significant number of individuals were qualified to apply for an ITIN but were unable to do so (CTC).
The senators wrote in a letter to Commissioner Rettig that they were “concerned to learn that there may be a significant number of families that had hoped to file for and receive the enhanced child tax credit but were unable to do so because of backlogs in the processing of Individual Taxpayer Identification Numbers.”
“To remedy this situation, we ask that you allow families who applied for an ITIN or ITIN renewal before April 15 to file for and receive the advanced CTC, provided that they file a return before or on October 15,” the letter reads. “This request is being made in the hopes that you will grant our request.”
Given that the current law mandates that an ITIN must be issued on or before the due date of the tax return to file for the CTC, many families did not receive their ITIN before April 15, even though their applications were submitted on time.
As a result, these families are at a disadvantage when it comes to gaining access to the CTC, which many of them require to make ends meet and pay for the essentials in their homes.
According to information provided by TIGTA as well as the website of the IRS itself, the time it takes to process an ITIN application has increased to an average of three to four months while the time it takes to renew an ITIN has more than doubled to 41 days.
“As you are aware, the American Rescue Plan was responsible for the passage of a groundbreaking provision known as the enlarged CTC.
According to estimates provided by the researchers, the initial payment of the improved CTC, which took place in July of last year, was responsible for lifting approximately 3 million children out of poverty and bringing the monthly child poverty rate down from 15.8 per cent to 11.9 per cent.
As a conclusion reached by the senators, “after such a historic investment in families, it would be a tragic oversight to limit the availability of certain families due to unprecedented processing delays.” To the Honorable Secretary Yellen and the Honorable Commissioner Rettig,
“We are disturbed to learn that there may be a significant number of families who had intended to apply for and get the improved child tax credit (CTC) but were unable to do so because of backlogs in the processing of Individual Taxpayer Identification Numbers (ITIN).
Because the Protecting Americans from Tax Hikes (PATH) Act mandated that an ITIN had to be issued on or before the due date of the return to file for the Child Tax Credit (CTC), it is possible that many families did not receive their ITIN before April 15, even though they submitted their application promptly.
To rectify this situation, we are requesting that you grant permission for families that submitted an application for an ITIN or ITIN renewal before April 15 to apply for and receive the advanced CTC, provided that they submit a return before October 15th.
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According to the Treasury Inspector General for Tax Administration (TIGTA), previous to the COVID-19 epidemic, the usual processing time for ITIN applications ranged from seven weeks during non-peak times to eleven weeks at tax time.
This was the case even if peak times were less frequent. TIGTA and the IRS website both claim that processing times have lengthened, with the average time needed to complete an ITIN application now being three to four months and the time needed to renew an ITIN having doubled to 41 days.
“As you are aware, the American Rescue Plan was responsible for the passage of a groundbreaking provision known as the enlarged CTC.
According to estimates provided by the researchers, the initial payment of the improved CTC, which took place in July of last year, was responsible for lifting approximately 3 million children out of poverty and bringing the monthly child poverty rate down from 15.8 per cent to 11.9 per cent.
After making such a significant investment in families, restricting access to particular families because of exceptional processing delays would be a regrettable omission on the government’s part.
