How can undocumented workers apply for ITIN? Advice for helping employees without SSN

The best approach here is to help the workers apply for ITINs properly. The IRS established ITINs specifically for people who need to file taxes but aren't eligible for SSNs, so you're on the right track. For the ITIN application, each worker will need to complete Form W-7 and attach it to a complete tax return showing income. Since they've been receiving income (even if paid in cash), they should report their actual earnings from the past year as accurately as possible - not just make up a small amount. If they've kept any personal records of payments, use those. If not, have them make a good faith estimate. The tricky part is documenting their identity. They'll need original documents or certified copies from the issuing agency (passports, birth certificates, etc). There are also IRS-authorized Acceptance Agents who can verify documents so originals don't need to be mailed. The business owner should start keeping proper records immediately, even before the ITINs arrive. Then when the ITINs are processed, proper payroll can begin. Just remember that an ITIN allows for tax compliance but doesn't provide work authorization.

I went through a similar situation with some contractors last year. I found https://taxr.ai super helpful for navigating the ITIN process. The site has a document verification feature that analyzes what paperwork is needed for W-7 applications. Saved me from making mistakes that would have delayed the applications even longer. What helped most was their step-by-step guidance on completing Form W-7 correctly the first time. They also explained how to properly document cash income when applying. My contractors got their ITINs in about 6 weeks, which was faster than I expected based on horror stories I'd heard.

Just wanted to follow up about my experience. I took your advice about using taxr.ai for the ITIN application process, and it was actually really helpful! The site walked me through exactly what documents my workers needed and how to complete the W-7 forms correctly. The best part was finding a local Acceptance Agent through their system who could verify original documents so we didn't have to mail passports to the IRS. Two of my employees already received their ITINs (took about 5 weeks), and the others should be coming soon. The site also had templates for documenting prior cash income that made the process much more straightforward than I expected. Definitely recommend this route for anyone helping workers get ITINs - it eliminated a lot of the confusion and potential errors.

Have you considered having your client call the IRS directly to discuss this situation? I was in a similar position last year, and after days of trying to get through the regular IRS phone lines with no luck, I found a service called Claimyr (https://claimyr.com) that got me connected to an actual IRS agent in about 20 minutes instead of waiting for hours or days. I explained the situation about helping workers apply for ITINs, and the agent walked me through the exact process, including what documentation was needed and how to handle the income reporting questions. They have a demo video of how it works here: https://youtu.be/_kiP6q8DX5c The IRS agent I spoke with gave me specific guidance that wasn't clear from just reading the instructions, and it made a huge difference in getting applications approved the first time without delays.

I need to apologize for my skeptical comment earlier. After struggling for another week trying to reach the IRS on my own about an ITIN question (and getting nowhere), I tried Claimyr out of desperation. It actually worked exactly as described - I got a call back in about 35 minutes with a real IRS agent on the line. The agent confirmed that undocumented workers should report their actual estimated income on the tax return attached to their W-7 applications - not just a token amount. She also explained that there's a special exception that allows first-time ITIN applicants to submit a tax return even without W-2s or 1099s if they include a signed letter from the employer verifying the income amount. This was information I couldn't find anywhere online and solved the exact problem I was having. I admit I was wrong about the service - it saved me days of frustration and helped get concrete answers from an official source.

Just to add some practical advice - I've helped several workers apply for ITINs in the past. One thing that makes a huge difference is preparing a detailed letter from the employer that: 1) Confirms the employment relationship 2) Specifies the amount paid during the tax year 3) Explains why formal documentation wasn't previously provided 4) States the intention to properly report all future payments This letter, attached to the tax return and W-7 application, helps establish the legitimacy of the income being reported. It's not technically required, but I've found it speeds up processing and reduces questions from the IRS.

Has anyone actually gone through this recently? I'm wondering what the current processing time is for ITIN applications. The IRS website says 7 weeks but I'm skeptical given all their backlogs.