[lavariegaj]

My husband and I have been financially supporting my in-laws, who live in mexico, for about 5 years. I recently learned that we could claim them as dependents, but first have to request TIN for them. We filed a W7 but it was rejected because I didn't 'provide the U.S. person's name and/or TIN.' They also requested a copy of our tax return clearly indicating it is a copy with valid and unexpired supporting indeitifcation documentation that will prove identity and foreign status. However, my in-laws have never filed U.S. tax returns, so we are unsure about how to reapply. Do we send our tax returns, even though they are applying for the TIN? Advice?

[AtlantaTaxExpert]

You are mis-informed about being allowed to claim them as dependents.

In order to claim your husband's parents as dependents, they MUST be located within the United States and meet the 183-day Substantial Presence Test. Their presence in the U.S. must be proven by presenting notarized photocopies of the passports and visas which clear show them to be located within the U.S. borders during the tax year.

Since they are in Mexico, they will not qualify.

[IntlTax]

I believe ATE is mistaken. They do not need to be U.S. citizens or residents as long as they are residents of Mexico or Canada. See Code § 152(b)(3)(A) (Mexico is a country contiguous to the U.S.). You should probably include the Form W-7 with your Form 1040 when you file it claiming the parents as dependents. See the instructions to the W-7.

[AtlantaTaxExpert]

IntlTax is correct and I stand corrected.

Residents of Mexico and Canada who otherwise meet the criteria for "qualifying relative" can in fact be claimed as dependents on your tax return. It appears that your in-laws DO meet this criteria.

You will need to FIRST amend your 2007 return (the 2006 and earlier returns are OUTSIDE of the 3-year statute of limitation for claiming refunds and cannot be amended). Submit the Form 1040X while listing your parent names as dependents.

Submit a Form W-7 for each parent and staple a notarized photocopy of their passport picture page to the Form W-7. Your parents DO need to sign the Form W-7. You can get the photocopy notarized at virtually ANY local bank in the United States (except in California, which has some unique laws which prohibits this process). You can also get the photocopy certified as a true copy at your local IRS office.

Once that amendment is accepted and the ITINs are issued to your parents, you can then amend the 2008 and 2009 returns using the issued ITINs.

Expect the original 2007 amendment to take between 8 -12 weeks to process.

If you need professional help doing this, contact me at [email protected], as I am also a Certifying Acceptance Agent and can expedite the processing the return and the ITIN request MUCH faster (4-6 weeks).