After a preparer and taxpayer work long and hard together to finalize a tax filing, it’s those simple easy things that can ruin the whole process and result in tax authority rejection of the filing - even due to an item as simple as taxpayer’s name.
One would think that this wouldn’t be an issue as surely a taxpayer’s name would be the most given fact in the filing. In reality, filed 1040 returns are not associated by IRS with taxpayer (taxpayer thinks they’ve filed, IRS doesn’t), ITIN applications are rejected, refund claims rejected or sitting on IRS account under different name variation, withholding tax credit (1042-S, 1099, FIRPTA) not issued, offshore streamlined return not registered for amnesty, expatriating taxpayers (and green card abandoners) not fulfilling the five year (other) return-filing requirement – ALL DUE TO THE NAME REPORTED ON THE RETURN.
How many taxpayers marry, filed under their married name but never register such name change with the United States Social Security Administration (SSA)?
How many foreigners take on anglicized names that don’t match their IDs (such as passports) and file a return using a name not on record?
How many taxpayers (and I’ve encountered this more often with foreigners) have multiple names and against conventional wisdom it’s quite unclear how to divide the names between first name, middle name and last name. I’ve seen multiple cases where such taxpayer had multiple documents, passports and US immigration visa – all differently configuring which part of the name belonged where.
Passport Canada allows for issuing Canadians a Canadian passport using their nickname, that isn’t their legal name. What if that Canadian files a return or ITIN application, there are now two names – the legal name and the passport name.
Generally, the full legal name you provide with a SSN on an IRS filing must be associated with that SSN and must exactly match the name on file with the United States Social Security Administration (SSA), as IRS relies on SSA records for such purpose (an e-file rejection will ensue if the return name doesn’t match the SSA record).
IRS in general say that as long as the first and last name match the SSN on record with SSA, that's all it needs for processing return filings, while the middle initial or name is inconsequential for said goal (note that a 1040 return form requests only the middle initial not the full middle name).
Typically, it’s the name on the issued social security card and if the person changed their name at marriage AND registered that name with SSA, then it’s the married name, but if a name change was never registered, then it’s the original name. If unsure, one is advised to contact SSA and find out.
A name can create a conundrum for ITIN renewal because IRS typically issues an ITIN renewal using same name/number. See the following exchange between me and IRS ITIN department, to which IRS replied “We are researching your additional inquiry and hope to provide a response by”
Sent to IRS: Note that this ITIN applicant was a renewal and IRS has previously issued the applicant an ITIN. The W-7 sought renewal under same name as the original ITIN since applicant’s name hadn’t changed since the first ITIN application and issuance. The attached note outlines different name uses and periods of the applicant and this explanatory document was submitted with the W-7 renewal.
RE: The applicant’s name as shown on the passport does not agree with Line 1a of the W-7 application, therefore, her identity has not been verified. It will be necessary to submit to the ITIN Unit a copy of the CP 566 Notice, Form W-7(COA), and copies of valid documents that agree with the applicant’s name as shown on Form W-7.
Following that instruction will result in a catch 22 conundrum. You have a woman whose legal name hasn’t changed since the IRS issued her an ITIN, the only thing changed is how she lists herself on her Canadian passport (which doesn’t require the legal name to be listed). IRS doesn’t want her to apply to be reissued the very same ITIN, under renewal, but now under a different name, does it? If she were to follow the instructions of the ITIN dept in this e-mail, that’s what would result. Instead, she has applied for renewal under exactly the same name her original ITIN was issued. There does not exist sufficient unexpired valid documents that agree with the applicant’s name as shown on Form W-7, because her Canadian passport is now under her Anglo-Saxon name. Thus, she applied under same name and provided the explanation of the different names. Does IRS want her to change her W-7 to the name on her Canadian passport with the result that IRS will have issued the same ITIN to the same person - who did not have a name change since the first ITIN was issued - but under two different names?
The IRS itself is communicating with W-7 applicant under the name used in her W-7 and has processed her 1040NR under that name. If we keep the same ITIN under renewal and switch the name, IRS records will become scrambled and e-file will be rejected for names/TIN not matching. Please advise.
I was not involved with applicant’s original W-7 filing or return filing, only with the ITIN renewal application.