Identification

• A taxpayer identification number is a number used by the IRS to process tax information. All taxpayer identification numbers are nine-digits long, and some of the digits provide certain information about the person or the agency that issued the number. In some cases, a taxpayer identification number can have a variety of uses, such as a social security number, which is also used to track an individual's federal retirement and disability benefits and to prove eligibility to work in the United States.
  
  

Types

• The most common form of taxpayer ID is the social security number, first issued in 1936. U.S. citizens can use their social security number as proof of eligibility to work, and it also identifies them on their federal tax returns. Individuals who do not qualify for an unrestricted social security number must obtain an individual taxpayer identification number (ITIN) to claim a federal tax refund. Businesses, which must report and transfer withholding taxes, and other entities like trusts, must obtain a nine-digit federal employer identification number (FEIN or EIN).
  
  

Features

• The format of tax all nine-digit taxpayer or employer identification numbers is three numbers, two numbers, and four number -- with each group separated by hyphens (AAA-GG-SSSS). The first three numbers, which indicate area, correspond to the location of the issuing office in social security numbers issued before 1973. After that date they correspond to the area code of the mailing address given in the original application for the number. In ITINs, the first digit is always 9, and the second group of digits always begins with a 7 or 8.
  
  

Application

• The form used to apply for an ITIN is the W-7. Only resident and non-resident aliens who are not eligible for a social security number should submit this form. A social security number can be obtain by submitting Form SS-5 to the nearest social security office. A business entity can apply for an EIN by submitting Form SS-4 to the IRS or completing the online interview-style application at the website.
  
  

Significance

• Unlike the social security number and EIN, an individual taxpayer identification number (ITIN) has no use outside of the tax system. It cannot be used for identification purpose or to obtain state ID. It cannot be used as proof of eligibility to work. Also, it has no effect on a person's immigration status.