Asking for support to submit 1065 form without ITIN.Help!!

[NIRA0213]

We registered our LLC Partnership last year in USA.

This is the very first time we are submitting a tax file. Our partners are srilankan and they don't have SSNs or ITINs. 

Because of that issue we can't fill the schedule - K properly.

What can we do about this?

[DavidD66 · Accepted solution]

You will have to print and mail your Form 1065 along with Forms W-7, Application for IRS ITIN.

A partnership must provide a U.S. TIN for each foreign partner. The partnership should notify any of its foreign partners without a valid TIN of the necessity of obtaining a U.S. TIN. An individual's TIN is the individual's social security number (SSN) or ITIN.

Certain aliens who cannot obtain SSNs can now apply for ITINs on Form W-7, Application for IRS Individual Taxpayer Identification Number.

[Mike9241]

the partnership return is due 3/15/2023 so you may need to file an extension for the partnership until all partners get an ID number. the extension allows timely filing through 9/15/2023

[yuan60101]

Hi@DavidD66 

Your answer 'A partnership must provide a U.S. TIN for each foreign partner' is not TRUE. For the income only from marketable securities, ITIN is not needed for foreign partner, not needed on W-8Ben as well. See details

https://www.irs.gov/individuals/international-taxpayers/us-taxpayer-identification-number-requiremen...

My question: does TurboTax Business allow us to file 1065 if a foreign partner doesn' require to have ITIN ??

[DaveF1006]

No, you won't be able to file if your foreign partners do not have an ITIN. You may file an extension for your partnership return this gives you until September 15 2020 to file the partnership return. You cannot file a US tax return without an SSN or an ITIN.  

Your partner can also file an extension for his personal return which gives him until October 15, 2020 to file his return. He needs to pay any tax due by April 15, 2020.  The extension is just an extension of time to file the tax return.

Then once you have your ITIN you can file the partnership and personal tax return.  You do not need to wait until the extension date ends.

[yuan60101]

@DaveF1006Please pay attention to my previous question 'file 1065' (not filing foreigner's 1040NR, which does require ITIN).

Filing 1065 for income from Marketable Securities does NOT require foreigners to apply ITIN. That is specifically mentioned in that IRS link I provided, please read carefully. It says:

Exceptions to TIN requirement

A foreign person does not have to provide a U.S. TIN to claim a reduced rate of withholding under a tax treaty if the requirements for the following exceptions are met.

• Income from marketable securities (see below).

...

[DaveF1006]

Yes, I do agree that it is specifically mentioned that the foreign partner does not need a TIN to claim a reduced rate of withholding. Furthermore, "IF foreign partners are not required to obtain an SSN or TIN, a partnership should enter 000-00-0000 in Item E if the partner is an individual or 00-0000000 if the partner is an entity.  This change in e-file policy at the IRS should not be interpreted by partners, partnerships, and their tax preparers as a policy that partners who were not previously required to obtain an SSN or TIN are now required to do so". 

Thank you for pointing this out.

What can be entered in Schedules K-1 and K-3 in place of FOREIGNUS

@yuan60101 

[yuan60101]

@DaveF1006Thanks so much for you to confirm!!! Appreciate that you found we can use 000-00-0000 for e-file!!! Otherwise, I have to use TaxAct to file our 1065. TaxAct allows to use 'APPLD FOR' the identification number field.

Thanks again for your support and time!

[yuan60101]

@DaveF1006According to your last msg, I put [removed] in TurboTax Business for the foreign partner who is not required for ITIN. However, TurboTax regards it as the Error, in this case, can I still E-file the return or not???

It's really pain to notice it upon the finish.

[yuan60101]

@DaveF1006 Looks like last msg I sent with 9 zeros for ITIN was REMOVED.

[DaveF1006]

If entering zeros will not allow you to efile, try 99-0999999 to see if this will work.

@yuan60101 

[yuan60101]

Spoiler

Hi @DaveF1006, entering [removed] is no longer generating the error, that's great!! However according to your previous message, IRS wants the input of Zeros instead, then my question comes out, how could IRS know these 9's are equivalent to 0's?? Will I get trouble later from IRS by doing that??

[RobertB4444]

If the zeroes are no longer generating the error then stick with the zeroes.  That is what the IRS has requested.  If the 9s are the only way to continue through the program then use the 9s to get the tax return done and then go back and change the 9s to zeroes and file the return by mail.

@yuan60101