How to Apply for an ITIN: Step-by-Step Instructions for DVC Sellers
If you are a non-US person selling a DVC contract, you need a US tax identification number to file your tax return and get your FIRPTA refund. That number is called an ITIN, short for Individual Taxpayer Identification Number. It is like a Social Security Number, but for people who are not eligible for an SSN.
Getting an ITIN is not hard, but the process has specific requirements. Here is exactly how to do it.
What Is an ITIN?
An ITIN is a 9-digit number issued by the IRS to individuals who need to file a US tax return but don't qualify for a Social Security Number. It starts with the number 9 and is formatted like an SSN (9XX-XX-XXXX).
You don't need to be in the US to get one. You don't need a US bank account. You just need a valid reason to file a US tax return, and selling US real property (including a DVC contract) is one of the most common reasons.
When to Apply
You can apply for an ITIN at the same time you file your tax return. In fact, that's the most common approach. You attach your completed Form W-7 (ITIN application) to your Form 1040-NR (non-resident tax return) and mail them together to the IRS. The IRS processes the ITIN application first, assigns your number, then processes your tax return.
You can also apply for an ITIN before your sale closes, but there's no real advantage to doing so. Most sellers wait until they're ready to file their tax return and submit everything at once.
What You Need
The ITIN application requires:
- Completed Form W-7. This is a two-page form. It asks for your name, foreign address, country of citizenship, date of birth, and the reason you're applying (check box "a" for filing a tax return).
- Your tax return. You must attach the tax return that requires the ITIN. For DVC sellers, this is Form 1040-NR reporting the sale of your contract.
- Identity documents. You need to prove your identity and foreign status. The easiest option is your valid passport. A passport alone satisfies both requirements. If you don't have a passport, you'll need two documents from the IRS's accepted list (national ID card, birth certificate, driver's license, etc.).
Three Ways to Submit
Option 1: Mail everything to the IRS. Send your W-7, 1040-NR, and certified copies of your identity documents to the IRS ITIN unit in Austin, Texas. Certified copies must be certified by the issuing agency (your country's passport office, for example) or a US embassy/consulate. Do not send originals unless you want to wait months to get them back.
Option 2: Use a Certified Acceptance Agent (CAA). A CAA is a tax professional authorized by the IRS to verify your identity documents and submit the application on your behalf. The advantage is that they can verify your passport in person, so you don't have to mail your original or get certified copies. The cost is typically $50-$200 on top of their tax preparation fees. Find a CAA on the IRS website.
Option 3: Visit an IRS Taxpayer Assistance Center. If you happen to be in the US, you can walk into an IRS office, show your passport, and submit the application in person. They verify your identity on the spot. But most non-US DVC sellers aren't making a special trip to the US for this.
Processing Time
The IRS says ITIN processing takes 7-11 weeks. In our experience, it's often closer to 8-10 weeks. During tax season (January through April), it can take longer because the ITIN unit is busier.
Once your ITIN is assigned, the IRS processes your 1040-NR and your FIRPTA refund. The refund typically arrives 4-6 months after the IRS receives your filing. So from mailing your application to receiving your refund, expect roughly 6-8 months total.
Common Mistakes That Delay Your ITIN
The most common reason ITIN applications are rejected or delayed is documentation problems. Here's what to watch out for:
- Sending a photocopy of your passport instead of a certified copy. A regular photocopy is not accepted. It must be certified by the issuing agency or a US embassy.
- Forgetting to attach the tax return. The W-7 must be submitted with the tax return that requires the ITIN. Without the tax return, the IRS will reject the application.
- Using an expired passport. Your passport must be current (not expired) at the time of application.
- Incomplete W-7 form. Every field must be filled in. Missing information causes delays.
- Wrong mailing address. The ITIN unit has a specific mailing address in Austin, Texas. Don't send it to the regular IRS processing center.
ITIN Renewal
ITINs expire if they're not used on a tax return for three consecutive years. If you already have an ITIN from a previous transaction, check that it's still active. Expired ITINs can be renewed by filing a new W-7 with your tax return.
Our Recommendation
For most DVC sellers, the easiest path is to hire a US tax professional who handles non-resident returns. They'll prepare your 1040-NR, complete the W-7, tell you exactly which documents to provide, and submit everything correctly. The cost ($500-$1,500) is well worth it when your FIRPTA refund is $2,000-$4,000.
If you want to do it yourself, the IRS provides detailed ITIN instructions on their website. The forms are free to download. Just be meticulous about the documentation requirements and give yourself plenty of time for processing.
