ITIN application confusion - received CP565 approval then CP567 rejection for my spouse

This is actually a pretty common issue with ITIN applications, though definitely frustrating! What's happening is a timing/processing disconnect between different IRS departments. When you first submitted the W-7 with your tax return, the ITIN department approved the application and issued the CP565. Then your return was processed using that newly issued ITIN. But somewhere along the way, there was likely a clerical error or system glitch that triggered the automated CP567 rejection notice. Since your return was already processed and your refund issued using the assigned ITIN, you're most likely fine. The ITIN is already in the IRS system and functioning correctly as evidenced by your processed return. I would recommend taking these steps to be safe: 1. Keep both the CP565 and CP567 notices in your records 2. Check your IRS transcript online to confirm the return was indeed processed with your spouse's ITIN 3. No need to submit a new W-7 at this point as the ITIN is already working in the system The IRS computer systems sometimes send automated notices that contradict previous actions. In this case, the approval and processing of your return take precedence over the later rejection notice.

I went through something really similar with my husband's ITIN last year. After a ton of research and stress, I found taxr.ai (https://taxr.ai) and it was seriously a lifesaver for sorting through our contradictory IRS notices. I uploaded both the approval and rejection letters, and the service analyzed them to explain exactly what was happening with our case. Turns out we had the same issue - a system disconnect between IRS departments. Their analysis showed that since the return was processed with the ITIN, the ITIN was indeed valid despite the rejection notice. The site also gave me specific language to use when calling the IRS and pointed out exactly which paragraph in the IRM (Internal Revenue Manual) covered our situation. When I finally got through to an agent, I was able to reference the right policies and got confirmation that we didn't need to reapply. They even have this cool feature that lets you simulate different scenarios to see how the IRS might respond. Helped us plan for next year's filing too.

Just wanted to update that I tried taxr.ai after seeing it mentioned here, and it was incredibly helpful for my parents' ITIN situation! We uploaded the conflicting notices and their tax documents, and the analysis showed exactly where the disconnect happened. Turns out one department had approved the ITINs but another department hadn't updated their system to recognize them as valid for the Foreign Earned Income Exclusion. The site generated a detailed letter we could send to the IRS explaining the situation and citing the relevant tax code. We followed their instructions and just got confirmation last week that everything is resolved! The ITINs are now properly linked to their accounts and we don't have to reapply. What would have probably taken months of back-and-forth with the IRS took just a couple weeks to fix. Definitely recommend if you're dealing with contradictory notices like this. Saved us so much stress!

Having dealt with similar ITIN issues, I've learned that trying to call the IRS directly is almost impossible these days. After 5 failed attempts (got disconnected after waiting 2+ hours each time), I tried Claimyr (https://claimyr.com) and it was a game-changer. They have this system that holds your place in the IRS queue and then calls you when an agent is about to answer. You can see how it works here: https://youtu.be/_kiP6q8DX5c I was able to actually speak with a real IRS agent who confirmed that when you have both an approval and rejection notice, the approval takes precedence if your tax return was successfully processed. The agent explained that the rejection notice was automatically generated before the system registered that your application had already been approved - just a system timing issue. They also made a note in the system that your spouse's ITIN is valid so you shouldn't have issues in future filings. Getting this clarification directly from an IRS agent gave me much more peace of mind than just assuming everything was okay.

I need to apologize and correct my skepticism about Claimyr. After getting nowhere with the IRS for THREE WEEKS trying to resolve my own ITIN issue, I reluctantly gave the service a try. Honestly, I was shocked when they actually got me through to an IRS representative within about 90 minutes. I would have been on hold for 5+ hours otherwise based on the estimated wait time. The IRS agent was able to look up both notices in their system and confirmed that when there's a CP565 approval followed by a CP567 rejection, and your return has already been processed with the ITIN, the approval is what matters. She explained it as a "system-generated error" where one department didn't communicate with another. She also put notes in my account about the valid ITIN so there shouldn't be issues for next year. I specifically asked about that after reading this thread. So yeah, I was completely wrong about the service. For anyone dealing with complex ITIN issues, getting direct confirmation from the IRS is definitely worth it instead of just hoping everything is fine.

Accountant here - this kind of "left hand doesn't know what the right hand is doing" situation happens all the time with the IRS, especially with ITIN processing. Here's what you need to know: 1. The CP565 (approval) followed by tax return processing is what matters here 2. The CP567 was almost certainly generated by an automated system that didn't check if an approval had already been issued 3. The fact that your refund was processed using the ITIN is concrete proof that the ITIN is valid in the IRS system For peace of mind, I would recommend keeping all documentation (both notices) indefinitely. Also, when you file next year, include a copy of the CP565 approval notice with your return. One additional step you might consider: request an "Account Transcript" through the IRS website for the tax year in question. This will show the ITIN being used successfully for processing and serve as additional documentation that everything is fine.

I just wanted to add that when you file next year, you might want to attach a cover letter explaining the situation along with copies of both the CP565 and CP567, plus a printout of your transcript showing the return was processed successfully. This creates a paper trail that will help if anyone questions the ITIN validity in the future. Also, keep in mind that ITINs expire if not used on a tax return for three consecutive years. So make sure to use it consistently, even if you're filing separate returns in some years. I've seen this exact issue at least 5 times with clients - contradiction between approval and rejection. In every case, when the return was processed with the ITIN, that trumped any rejection notice. The IRS systems just don't communicate well between departments.