- What identification number should the couple use for the child?
Answer: Apply for an adoption taxpayer identification number (ATIN) using Form W-7A and enter that number on the return.
Governing authority: Form W-7A instructions; Form 1040 instructions. A child placed for adoption who meets the dependency tests may be claimed, but a claimed dependent must have a taxpayer identification number. When a U.S. citizen child placed for adoption cannot obtain an SSN before the return is due because the adoption is still pending, the taxpayer may apply for an ATIN with Form W-7A and enter that ATIN on the return. Choice C is correct. Choice A is wrong because an adoption agency's case number is not a taxpayer identification number. Choice B is wrong because a pending adoption does not waive the requirement that the dependent have a TIN. Choice D is wrong because Form W-7 is the ITIN application; a child eligible for an ATIN should use Form W-7A rather than an ITIN application.
- Which of the following is correct regarding the third-party designee box on a taxpayer's 2025 Form 1040?
Answer: The designee may discuss the processing of the return with the IRS and receive copies of notices and transcripts, but may not represent the taxpayer before the IRS or receive the refund.
Governing authority: 2025 Form 1040 Instructions, Third Party Designee. The third-party designee authorization is limited to discussing the processing of the return with the IRS and requesting copies of notices and transcripts. It does not authorize representation, receipt of the refund, or binding acts. Representation before the IRS requires Form 2848; access to tax information without representation can be obtained with Form 8821. Choice C is correct. Choice A misstates the scope: even if the taxpayer is present, the designee cannot represent. Choice B misstates the authority: the designee cannot receive or direct the refund. Choice D misstates duration: the authorization ends automatically on the due date (without regard to extensions) of the next year's return, here the 2026 return, unless revoked earlier; it does not run to the end of the limitations period.
- Which of the following is correct regarding the taxpayer's ITIN?
Answer: The ITIN expired because it was not used for three consecutive tax years, and the taxpayer must submit a new Form W-7 with the 2025 return to renew it.
Governing authority: Instructions for Form W-7 (ITIN expiration and renewal). An ITIN that is not included on a federal tax return for three consecutive tax years expires. A taxpayer whose ITIN has expired must submit a new Form W-7 with supporting documentation to renew it. The taxpayer's last use was on a 2021 return, so the ITIN expired after 2024 and must be renewed for use on the 2025 return. Choice D is correct. Choice A misstates the expiration rule; no rule exempts post-2018 ITINs. Choice B misstates the renewal procedure: renewal is not automatic. Choice C misstates the lookback: the nonuse period is three, not five, consecutive tax years.
- Which is the correct advice to give the taxpayer?
Answer: She should use the SSN on the 2025 return because the ITIN is no longer valid for federal tax purposes once an SSN is assigned.
Governing authority: IRC § 6109; Form W-7 instructions. An ITIN is used only by a taxpayer who is not eligible for an SSN. Once an SSN is assigned, the ITIN is no longer valid for federal tax purposes, and the taxpayer must use the SSN on returns filed after the assignment. Choice B correctly describes this result. Choice A is wrong because prior use of the ITIN and the date the SSN was issued do not make the ITIN available once an SSN exists. Choice C is wrong because a taxpayer may not split income between two TINs on one return. Choice D is wrong because prior returns do not need to be amended solely to replace an ITIN with an SSN.
- Which is correct regarding whether they satisfy the Social Security number requirement for the child tax credit for 2025?
Answer: They satisfy the requirement because each child has a valid Social Security number and at least one spouse has a valid Social Security number.
Governing authority: IRC § 24; Form 1040 instructions. For 2025, the Social Security number requirement for the child tax credit is that each qualifying child have a valid Social Security number and that, on a joint return, at least one spouse have a valid Social Security number; the other spouse may have an ITIN. Choice D is correct. Choice A is wrong because both spouses do not need SSNs. Choice B is wrong because the husband's SSN is not required; the wife's SSN satisfies the spousal requirement. Choice C is wrong because the children already satisfy the child-SSN requirement, and only one spouse needs an SSN.
- Which of the following is correct?
Answer: She must renew the ITIN by filing Form W-7 with the renewal box checked and the required identity documents; the Form W-7 may be submitted with her 2025 return.
Governing authority: IRC § 6109(i)(3)(B); Form W-7 instructions. An ITIN that has not been included on a federal return for three consecutive tax years expires at the end of the third year. The client's ITIN was last used on a 2021 return and was not used for 2022, 2023 or 2024, so it expired on December 31, 2024. To use an ITIN on her 2025 return she must renew it on Form W-7, checking the renewal box and providing the required identity documents. The W-7 instructions permit the renewal application to be submitted with the return or on its own, before filing. Choice C is correct. Choice A is wrong because an expired ITIN is not valid for use on a return and can delay processing and deny credits. Choice B is wrong because Form SS-5 is used to apply for a Social Security number, not to renew an ITIN. Choice D is wrong because Form 8821 is a tax information authorization, not the ITIN renewal form.
- Which is the appropriate course of action?
Answer: File Form 4868 to extend the return, then file after the SSN is issued so the child can be claimed on the original return.
Governing authority: IRC § 151; Form 1040 instructions; Form W-7 instructions. Every dependent must have a TIN. A U.S. citizen child is not eligible for an ITIN, but the parent may extend the return with Form 4868 so the child's SSN can be obtained and entered on the original 2025 return. Choice A is correct. Choice B is wrong because writing 'Applied For' does not satisfy the requirement that the dependent's SSN be included. Choice C is wrong because a U.S. citizen cannot obtain an ITIN. Choice D is wrong because a 2025 dependency and credits cannot be claimed on a later-year return.
- Which statement is correct?
Answer: The Certifying Acceptance Agent may certify copies of the original passport and submit them with Form W-7 on the taxpayer's behalf.
Governing authority: IRC § 6109; Form W-7 instructions. A Certifying Acceptance Agent (CAA) is authorized to review original documentation, certify copies, and submit Form W-7 with those certified copies for an applicant who needs an ITIN, so the applicant does not mail the original passport to the IRS. Choice D is correct. Choice A is wrong because a CAA is an approved channel for submitting W-7 applications; the taxpayer need not mail the application personally. Choice B is wrong because notarized copies are not acceptable proof; acceptable submissions are originals, copies certified by the issuing agency, or copies certified by an acceptance agent. Choice C is wrong because the CAA's certification verifies the documentation submitted; it does not waive the proof-of-identity and foreign-status documentation requirement.
- Which of the following is correct for the couple's 2025 federal income tax return?
Answer: The couple may apply for an ATIN on Form W-7A and claim the child as a dependent, but the child is not a qualifying child for the child tax credit because an ATIN is not a valid Social Security number.
Governing authority: IRC § 6109(e) and the Instructions for Form W-7A. An ATIN is a temporary IRS-issued number for a child placed for adoption when the child cannot obtain an SSN. It allows the child to be claimed as a dependent, but it is not a valid SSN, so the child does not qualify for the child tax credit. Choice C is correct. Choice A drops the valid-SSN requirement for the child tax credit. Choice B misstates the timing: a taxpayer may claim an adopted child before the adoption is final if the residency test is met. Choice D misstates the number: Form W-7 is for an ITIN, and an ITIN would not satisfy the child tax credit SSN requirement.
- Which of the following is correct regarding the valid SSN requirements for Rosa's qualifying children for the earned income credit?
Answer: The son is a qualifying child because his SSN was issued before the due date of the return, but the daughter is not because an ITIN is not a valid SSN.
Governing authority: IRC § 32(c)(1)(F) and (c)(3)(D); Instructions for Form 1040. For EITC, a qualifying child must have a valid SSN issued by the SSA before the due date of the return (including extensions), not necessarily by December 31 of the tax year. The son's January 2026 SSN satisfies that rule; the daughter's ITIN does not. The $500 investment income is below the $11,950 EITC investment income limit, so it does not disqualify Rosa. Choice B is correct. Choice A states the wrong timing. Choice C misstates the law: no age-based exception waives the valid SSN requirement. Choice D reverses the result: the son's post-year-end SSN is timely and an ITIN cannot be used.
- Which of the following correctly describes the credits the couple may claim for 2025?
Answer: A $2,200 child tax credit for the daughter and a $500 credit for other dependents for the son, because the daughter has a valid SSN and the son does not.
Governing authority: IRC § 24 and the 2025 Form 1040 instructions. The child tax credit is $2,200 for a qualifying child with a valid SSN; on a joint return at least one spouse must have a valid SSN, but the other spouse may have an ITIN. The daughter satisfies the SSN requirement, so the couple may claim the CTC for her. The son does not have a valid SSN, so he cannot be a CTC qualifying child; however, a dependent who cannot be claimed for the child tax credit may qualify the taxpayer for the $500 credit for other dependents if the other requirements are met. Choice D is correct. Choice A ignores the child SSN requirement. Choice B misstates the spouse rule: the wife's ITIN does not block the CTC because the husband has a valid SSN, and it would not reduce the daughter's credit to the other dependent credit. Choice C overlooks the $500 credit for other dependents for the son.
- Which of the following is correct regarding an Individual Taxpayer Identification Number (ITIN) for 2025?
Answer: An ITIN may be used by an alien who is ineligible for an SSN to file a return, but it does not authorize employment or entitle the holder to claim the earned income credit.
IRC § 6109, IRC § 32(c)(1)(E) and (m), and the Instructions for Form W-7. The IRS, not the Social Security Administration, issues an ITIN to an alien who must file a U.S. tax return but is not eligible for a Social Security number. The ITIN is used only for federal tax reporting; it does not authorize employment. It also does not qualify the holder for the earned income credit, because the earned income credit requires a valid Social Security number for the taxpayer, for the spouse on a joint return, and for each qualifying child, and an ITIN is not a Social Security number for this purpose. Choice B therefore states both halves of the rule correctly. Choice A is wrong because the IRS, not the SSA, issues ITINs, and an ITIN never authorizes employment, whatever the holder's visa status. Choice C is wrong because the child tax credit requires the qualifying child to have a valid Social Security number; an ITIN does not satisfy that requirement, and the child's residency and time living with the taxpayer do not change it. Choice D is wrong on both points: the IRS issues the ITIN, and its purpose is filing federal tax returns, including an individual income tax return, not employment tax reporting.
