ITIN Exception 5 lets a non-U.S. representative of a foreign corporation get an ITIN without filing a tax return, when the ITIN is needed to meet the corporation's e-filing requirement under T.D. 9363. You apply on Form W-7 with a letter from your employer.
| Fact | Detail |
|---|---|
| Who it is for | A non-U.S. representative of a foreign corporation who needs an ITIN for T.D. 9363 e-filing |
| Form | Form W-7, box h, with "Exception 5, T.D. 9363" on the dotted line |
| Tax return attached | None. Exception applicants don't attach a tax return |
| Exception document | An original signed letter from your employer on corporate letterhead |
| Identity documents | A valid passport alone, or at least 2 types of documents from the list of 13 |
| What T.D. 9363 is | The Treasury final regulation on required corporate e-file, dated December 3, 2007 |
| E-file threshold since 2024 | Certain corporations filing 10 or more returns in a calendar year (the 250-return threshold before) |
| Processing time | 7 weeks, or 9 to 11 weeks from January 15 through April 30 or from overseas |
What is ITIN Exception 5?
ITIN Exception 5 is a Form W-7 exception for a non-U.S. representative of a foreign corporation who needs an ITIN to meet the corporation's e-filing requirement under T.D. 9363. It lets you apply without the tax return most first-time applicants must attach.
An ITIN is a nine-digit number the IRS issues to individuals who need a U.S. taxpayer identification number but don't have, and aren't eligible to get, a Social Security number (SSN).
Exception 5 is one of 5 exceptions listed under box h ("Other") on Form W-7. The other 4 cover passive income, other income, mortgage interest, and dispositions of U.S. real property by a foreign person.
Exception 5 is the only one tied to a corporation's e-filing requirement.
What is T.D. 9363?
T.D. 9363 is the Treasury final regulation on required corporate e-file, dated December 3, 2007. It made certain large corporations file their income tax returns electronically instead of on paper.
As issued, T.D. 9363 applied to corporations with assets of $10 million or more that file at least 250 returns annually. Those corporations had to e-file Forms 1120 and 1120-S for tax years ending on or after December 31, 2007.
The rule then reached foreign corporations. A foreign corporation filing Form 1120-F, U.S. Income Tax Return of a Foreign Corporation, came under T.D. 9363 for tax years ending on or after December 31, 2008, if it had assets of $10 million or more and filed at least 250 returns annually.
For the $10 million test, a foreign corporation filing Form 1120-F can elect whether Schedule L, the balance sheet on that return, shows worldwide assets or only U.S. connected assets.
What changed under T.D. 9972?
T.D. 9972, issued February 23, 2023, amended T.D. 9363. It replaced the 250-return threshold for mandatory e-filing with a 10-return threshold.
Since 2024, certain corporations filing 10 or more returns in a calendar year must e-file. Returns of different types all count toward the 10.
Picture a corporation that files 1 income tax return and 9 information returns in one calendar year. Counted separately, no single type reaches 10. Counted together, the total is 10, so the e-file requirement can apply.
A corporation that cannot e-file because of technology constraints can request a waiver. Notice 2010-13 sets out that waiver.
Who qualifies for Exception 5?
You qualify for Exception 5 if you are a non-U.S. representative of a foreign corporation with a T.D. 9363 e-filing requirement, your employer names you as responsible for its IRS information reporting, and you can't get an SSN.
In checklist form, all of these must be true:
- You are a non-U.S. representative of a foreign corporation.
- The foreign corporation has an IRS reporting requirement under T.D. 9363.
- You need an ITIN for the purpose of meeting that e-filing requirement.
- Your employer has designated you as the person responsible for ensuring compliance with IRS information-reporting requirements.
- You don't have an SSN and aren't eligible to get one.
T.D. 9363 is an e-filing rule, yet the Form W-7 instructions describe your role as "information-reporting requirements." Use that exact phrase in the employer letter so it matches what the IRS looks for.
Exception 5 is for an individual, not for the company. You are the person the corporation names to handle its IRS reporting.
What does an Exception 5 applicant look like?
Here is a hypothetical case. A finance director lives in Germany and works for a German company that files Form 1120-F electronically.
The company names the director as its person responsible for IRS information reporting. The director has no SSN and no U.S. tax return to file, so the director applies for an ITIN under Exception 5.
What documents do you need for Exception 5?
For Exception 5 you send 3 things: a completed Form W-7, an employer letter, and identity documents.
- Form W-7, with box h completed as shown in the next section.
- The employer letter. It must be an original signed letter from your employer on corporate letterhead.
- Proof of identity and foreign status. A valid passport is the only stand-alone document. Without one, send at least 2 types of documents from the list of 13 acceptable documents, with at least 1 showing your photo.
Check the employer letter against this list before you mail it:
- It is printed on the corporation's letterhead.
- It carries an original signature, not a scan or copy.
- It states that an ITIN is needed for T.D. 9363.
- It states that you have been designated as the person responsible for ensuring compliance with IRS information-reporting requirements.
Identity documents must be originals or certified copies from the issuing agency, and they must be current. A certified copy is one the issuing agency itself certifies and stamps.
The Exception 5 table in the Form W-7 instructions also carries a note: federal tax withholding and/or information reporting must take place within the current tax year. The instructions give no further detail on it for Exception 5.
Do you need a tax return for Exception 5?
No. Form W-7 filed under an exception goes in without a tax return. For Exception 5, the employer letter is your proof that you need an ITIN.
That means you can get the ITIN even if you have no U.S. tax return of your own.
How do you fill out box h on Form W-7 for Exception 5?
On Form W-7, check box h ("Other") and write "Exception 5, T.D. 9363" on the dotted line next to box h. Complete the rest of the form with your own details.
2 line rules matter here:
- Enter your legal name on line 1a exactly as it appears on your identity documents.
- Enter "N/A" on any section of a line that doesn't apply to you. Don't leave a section blank.
Where do you send an Exception 5 application?
You can mail an Exception 5 application, bring it to a designated IRS Taxpayer Assistance Center, or use a Certifying Acceptance Agent. The mailing address for Form W-7 is:
Internal Revenue Service ITIN Operation P.O. Box 149342 Austin, TX 78714-9342
Mailing means sending your original passport or certified copies with Form W-7. The IRS returns original documents to the address on Form W-7. If they aren't back within 60 days, you can call the IRS.
If you need your passport within those 60 days, you have 2 other routes:
- A designated IRS Taxpayer Assistance Center (TAC), by appointment only at 844-545-5640. The TAC returns your documents immediately.
- A Certifying Acceptance Agent (CAA), who verifies your documents and returns them immediately after review.
For someone based abroad, the real choice is usually between mailing a passport and going without it for weeks, or having a CAA verify it so the passport never leaves your hands for long.
How long does an Exception 5 ITIN take?
After you apply, the IRS notifies you in 7 weeks, typically, though it takes 9 to 11 weeks from January 15 through April 30 or if you apply from overseas.
If you apply from overseas, plan on 9 to 11 weeks. Apply well before the corporation's e-filing date, not in the week the return is due.
Does an Exception 5 ITIN expire?
Yes, it can. If an ITIN wasn't included on at least one U.S. federal tax return for the last 3 consecutive tax years, it expires on December 31 of the third consecutive tax year.
There is one carve-out. If your ITIN is only used on information returns filed by third parties, you don't need to renew it for that purpose.
What if Exception 5 does not apply to you?
If you are not a foreign corporation's designated representative for T.D. 9363 e-filing, Exception 5 is the wrong route. Check these options instead:
- You have your own U.S. tax return to file. Apply with Form W-7 and attach that return.
- You have passive income, other income, mortgage interest, or a disposition of U.S. real property. One of Exceptions 1 to 4 may fit.
- You have an SSN or can get one. Don't file Form W-7 at all. Use your SSN.
An ITIN is for federal tax purposes only. It doesn't entitle you to Social Security benefits and doesn't change your immigration status or your right to work in the United States.
Frequently asked questions
What does "Exception 5, T.D. 9363" mean on Form W-7?
It is the code for the T.D. 9363 exception, written on the dotted line next to box h. It tells the IRS you need an ITIN for a foreign corporation's e-filing.
Who can use the T.D. 9363 exception for an ITIN?
A non-U.S. representative of a foreign corporation whose employer designates that person as responsible for IRS information-reporting compliance. That person must also be ineligible for an SSN.
What should the Exception 5 employer letter say?
It should say that an ITIN is needed for T.D. 9363 and that you are the person responsible for ensuring compliance with IRS information-reporting requirements. It must be original, signed, and on corporate letterhead.
Can the corporation apply for an ITIN under Exception 5?
No. The IRS issues ITINs to individuals only. Exception 5 covers the person the corporation designates.
Do I attach Form 1120-F to my Form W-7 for Exception 5?
No. Form 1120-F is the corporation's return and stays out of your W-7 packet. The employer letter is what you send.
Is a passport enough ID for an Exception 5 ITIN?
Yes. A current passport proves both identity and foreign status by itself.
How many returns trigger T.D. 9363 e-filing now?
Since 2024, certain corporations filing 10 or more returns in a calendar year must e-file. T.D. 9972 replaced the 250-return threshold on February 23, 2023.
When did T.D. 9363 start applying to foreign corporations?
For Form 1120-F filers, T.D. 9363 applied to tax years ending on or after December 31, 2008, when the corporation had assets of $10 million or more and filed at least 250 returns annually.
How soon will I hear back on an Exception 5 ITIN?
Expect word in 7 weeks, typically. From January 15 through April 30, or when you apply from overseas, it takes 9 to 11 weeks.
Can a foreign corporation get out of e-filing?
Sometimes. Notice 2010-13 lets a corporation request a waiver when technology constraints prevent it from e-filing.
Sources
- Instructions for Form W-7 (Rev. December 2024)
- E-file for large business and international (LB&I)
- E-file for Large Business and International (LB&I): Frequently asked questions, Tax year 2023
Michael B
