CAA Recordkeeping Requirements (IRS Pub 4520)

Certified Acceptance Agents (CAAs) must follow strict recordkeeping requirements that support the Individual Taxpayer Identification Number application process. These rules ensure that every Form W-7 application is supported with accurate documentation and secure storage practices. Proper recordkeeping protects applicants and CAAs from delays, rejections, and penalties. Without compliance, CAAs risk suspension, termination, and severe damage to their professional credibility.

IRS Publication 4520 provides the official framework that defines recordkeeping obligations for all registered acceptance agents. It specifies which records must be retained, the duration of retention, and the formats considered acceptable. Publication 4520 also connects these requirements to additional guidance, including Revenue Procedure 2006-10 and Internal Revenue Manual 3.21.264. Together, these resources ensure consistency, oversight, and enforceable quality standards for every ITIN application submitted by CAAs.

This guide is written for Certified Acceptance Agents (CAAs), tax professionals, and individuals applying for an Individual Taxpayer Identification Number (ITIN). CAAs and tax preparers will learn precisely what documents must be preserved for compliance and audit readiness. ITIN applicants will understand how proper recordkeeping increases approval rates and prevents unnecessary delays. Readers will also learn about timelines, filing systems, compliance checks, and strategies to avoid common risks.

What Are CAA Recordkeeping Requirements?

Certified Acceptance Agents operate under the Internal Revenue Service's defined rules for handling Individual Taxpayer Identification Number applications. These rules outline exactly what records must be kept, how documents are organized, and why accuracy is essential. The goal is to maintain compliance, protect applicants, and ensure the integrity of the ITIN process. Below, each key aspect is explained with practical detail for professionals and applicants.

Definition of CAA Recordkeeping Requirements

• Records Required: CAAs must maintain complete files that include Form W-7, certificates of accuracy, and all reviewed identification documents.
  
  
• Original Documentation: CAAs must keep copies of original documentation and note whether dependent or primary applicants provided those documents.
  
  
• Guidance from IRS: The IRS issues clear guidance and procedures that acceptance agents must follow to comply with regulations and reporting standards.
  
  
• Establish Compliance: These requirements help determine compliance during IRS monitoring or audits, ensuring no violation of applicable rules or procedures occurs.

How Certified Acceptance Agents Differ

• Authority to Authenticate: CAAs have specific authority to review, verify, and certify identification documents instead of requiring applicants to mail originals.
  
  
• Additional Responsibilities: Unlike other acceptance agents, CAAs must establish written procedures, maintain business-level compliance programs, and submit records for review when requested.
  
  
• Certificate of Accuracy: A CAA must complete a certificate of accuracy for each applicant, confirming that the documents have been reviewed and that they comply with IRS regulations.
  
  
• Risk of Failure: Failure to comply with recordkeeping rules can trigger suspension, termination, or violation notices pursuant to Internal Revenue Service regulations.

Core Goals of Recordkeeping Requirements

• Quality Assurance: The program ensures acceptance agents implement accurate methods to verify applicant documents and maintain performance standards.
  
  
• Audit Trail: Records provide an audit trail that the IRS or another agency can access to monitor compliance or determine violations.
  
  
• Fraud Prevention: Proper processes help prevent fraudulent submissions, misuse of identification, and inaccurate taxpayer identification number (ITIN) assignments.
  
  
• Faster Processing: Accurate and complete recordkeeping accelerates ITIN processing, reducing delays for every applicant and supporting agency oversight.
  
  

CAA recordkeeping requirements represent more than just paperwork; they establish trust, ensure compliance, and protect applicants and the entities involved.

Legal Framework and IRS References

Certified Acceptance Agents must follow a structured legal framework that defines how they maintain compliance when processing Form W-7 applications. Each reference document carries unique authority, and together they create the standards used for reviews, audits, and monitoring. Below are the key sources of law and guidance that every CAA must understand.

• IRS Publication 4520: This guide provides acceptance agents with complete procedures, recordkeeping requirements, and compliance rules for processing Individual Taxpayer Identification Number applications.
  
  
• Revenue Procedure 2006-10: This procedure outlines how CAAs must establish programs, implement processes, and submit accurate documents in accordance with IRS authority.
  
  
• Treasury Regulation 301.6109-1(d)(3)(iv)(A): This regulation requires agents to verify identification documents, file forms correctly, and maintain records in respect to compliance standards.
  
  
• Internal Revenue Manual 3.21.264: This manual provides detailed instructions for IRS staff, ensuring consistent monitoring, accurate reviews, and enforcement of recordkeeping requirements for acceptance agents.
  
  
• Combined Framework: These references create a unified method for determining compliance, reviewing records, and monitoring Form W-7 processing.

These legal references ensure that acceptance agents maintain accuracy, establish procedures, and comply with regulations protecting applicants and the IRS.

Who Must Follow These Requirements?

CAA recordkeeping requirements apply to multiple groups that process Form W-7 applications. Each group carries unique responsibilities, and understanding their roles helps maintain compliance and protect applicants and the Internal Revenue Service. Below are the specific categories of individuals and entities required to follow these regulations.

• Individuals: CPAs, enrolled agents, and attorneys with Certified Acceptance Agent status must comply when they process Form W-7 applications.
  
  
• Entities: Tax firms, accounting practices, financial institutions, universities, and community organizations registered as acceptance agents must implement proper procedures.
  
  
• Responsible Parties: Designated individuals must sign Form W-7 COAs, verify documents, serve as IRS contacts, and ensure compliance with all recordkeeping rules.
  
  
• Limited Exemptions: Certain institutions, such as regulated financial organizations, may have exemptions, but they must maintain required records and respect IRS oversight.

By defining these groups, the IRS ensures that every applicant’s documentation is reviewed, recorded, and maintained per established compliance standards.

Complete Recordkeeping Requirements

CAA recordkeeping requirements are detailed and precise because they protect the IRS and every Individual Taxpayer Identification Number applicant. Certified Acceptance Agents must maintain accurate client files and organizational records and follow strict format rules for all submissions. Below are the core categories of documents and standards required to comply fully.

Client File Contents

• Form W-7: Every ITIN applicant file must include a complete and signed Form W-7 with supporting schedules.
  
  
• Certificate of Accuracy: Each file must contain a Form W-7 COA signed by the responsible party verifying the reviewed documents.
  
  
• Identification Documents: Copies of reviewed identity and foreign-status documents must be included along with verification notes.
  
  
• Tax Returns: A copy of the federal tax return or acceptable exception proof must be filed if applicable.
  
  
• IRS Notices: All related notices, including CP 565, CP 566, and CP 567, must be kept in the applicant’s records.
  
  
• Interview Notes: Each file must include intake sheets, interview notes, and logs of applicant communication.

Organizational Records

• Standard Operating Procedures: Written SOPs must document recordkeeping processes, staff responsibilities, and compliance measures.
  
  
• Quality Control: Files must include documentation of quality control checks and compliance review results.
  
  
• Training Certificates: All responsible parties must retain ITIN and forensic document training certificates.
  
  
• CAA Agreement: Signed CAA agreements, renewals, amendments, and termination notices must be adequately maintained.

Acceptable Formats

1. Paper: Original documentation, certified copies, and properly organized filing systems are acceptable.
   
   
2. Electronic: Secure scanned documents, digital photographs, and encrypted storage with backups are allowed.
   
   
3. Hybrid: A combination of paper and electronic records may be used with cross-referenced systems for easy access.
   
   
4. Integrity Standards: Records must remain accurate, complete, and accessible for audits or reviews.

Documentation Retention Standards

• Retention Period: All records must be retained for three calendar years following the year the Form W-7 is mailed.
  
  
• CAA Obligation: Acceptance agents must maintain complete documentation per IRS procedures and referenced regulations.
  
  
• Monitoring: The IRS may conduct reviews and audits to determine compliance with retention standards.
  
  
• Risk of Failure: Failure to retain accurate records may result in suspension, termination, or violation notices for the CAA.

These recordkeeping requirements ensure that acceptance agents protect ITIN applicants, maintain accurate records, and comply with IRS standards at every stage.

Timelines and Deadlines

CAA recordkeeping requirements include a strict three-year retention rule for every Form W-7 application mailed to the IRS. Records must be kept until the third December 31 following the mailing year. For example, if sent in March 2025, records must remain until December 31, 2028. The rule ensures applicants and acceptance agents maintain compliance during reviews or audits.

The CAA agreement follows a clear life cycle, with renewals required every four calendar years. Renewal applications must be submitted six months before expiration to allow adequate review. Processing typically takes up to 60 days for both new and renewal agreements. Failure to renew properly risks suspension of the acceptance agent's authority.

To maintain active program status, each CAA must submit at least five Form W-7 applications annually. Missing this minimum results in suspension and a one-year waiting period before reapplying. Standard ITIN processing takes seven weeks, but peak season applications may require nine to eleven weeks. International submissions and correction requests follow similar extended timelines.

Risks of Ignoring Requirements

When Certified Acceptance Agents fail to follow recordkeeping requirements, the consequences can affect their authority, reputation, and daily operations. The Internal Revenue Service monitors compliance closely, and lapses create significant risks for professionals and applicants. Below are the primary categories of risk every CAA should understand.

• Immediate Consequences: The IRS may suspend or terminate a CAA agreement, resulting in the loss of program privileges for acceptance agents.
  
  
• Long-Term Damage: Ignoring requirements can damage professional reputations, drive away clients, and create serious difficulty when reapplying for authorization.
  
  
• Operational Problems: Noncompliance often increases Form W-7 rejection or suspense rates, leading to corrective action plans and enhanced IRS monitoring.

By recognizing these risks, CAAs can respect the regulations, maintain compliance, and protect their applicants and professional standing.

Step-by-Step Compliance Process

Certified Acceptance Agents must follow a structured compliance process that ensures accuracy, protects applicants, and satisfies Internal Revenue Service oversight. This process begins with program enrollment, continues with ITIN application handling, and requires strict ongoing recordkeeping practices. Below are the key stages explained in actionable detail.

Becoming a CAA

• Training Requirements: All responsible parties must complete IRS ITIN Acceptance Agent Training and required forensic document training.
  
  
• Application Submission: Applicants must register with IRS e-Services and submit their CAA application with accurate business and owner details.
  
  
• Suitability Checks: The IRS conducts background and suitability checks to verify identity, authority, and business integrity.
  
  
• Document Uploads: Required certificates, professional licenses, and supporting documents must be uploaded within the established timelines.

Processing ITINs

1. Interview Applicants: Conduct an in-person or video interview to verify identity and review original documentation.
   
   
2. Verify Identity: Ensure all identification documents are valid, accurate, and comply with IRS requirements.
   
   
3. Complete Forms: Fill out Form W-7 and prepare a Form W-7 Certificate of Accuracy confirming documents reviewed.
   
   
4. Assemble Package: Attach the tax return if required, supporting identification, and properly completed forms.
   
   
5. Submission: Mail the application package to the IRS, track dates, and log the submission for recordkeeping.

Ongoing Recordkeeping

• Filing Systems: CAAs must establish filing systems for paper and electronic records that allow secure and easy access.
  
  
• Intake Standards: Implement standardized procedures for collecting, reviewing, and documenting applicant information.
  
  
• Internal Audits: Conduct periodic reviews of client files and organizational procedures to determine compliance.
  
  
• Remediation Workflows: Correct deficiencies, implement updates, and document all corrective actions under IRS recordkeeping requirements.

Following this compliance process allows CAAs to maintain accurate records, protect applicants, and comply with IRS monitoring and program standards.

Practical Scenarios and Edge Cases

CAA recordkeeping requirements are not limited to standard ITIN applications, as many cases involve complex documentation and special procedures. These scenarios demonstrate how Certified Acceptance Agents must apply compliance rules to protect applicants and meet IRS expectations. Below are examples that highlight real-world challenges and the required responses.

• Immigrant Family with Multiple Dependents: CAAs must create separate files for each dependent, verify relationship documents, and process multiple Form W-7 applications accurately.
  
  
• Foreign Students on F-1 Visa: The CAA must collect SEVIS letters, verify scholarship documentation, and apply for the student exception for the Individual Taxpayer Identification Number.
  
  
• Nonresident Real Estate Investor: The agent must retain property purchase agreements, verify withholding statements, and document exception use under IRS requirements.
  
  
• Administrative Issues: CAAs must address misapplied or duplicate Form W-7 numbers, process rejection notices, and retain extended records for corrections when necessary.

By preparing for these edge cases, CAAs can maintain compliance, reduce delays, and protect applicants from unnecessary risk or rejection.

FAQs

How long must CAAs keep ITIN application records under CAA recordkeeping requirements?

Certified Acceptance Agents must retain all records related to each ITIN application for three calendar years following the year of submission. For example, if a Form W-7 package is mailed to the IRS in March 2025, all associated records must be preserved until December 31, 2028. This requirement applies to paper and electronic files and ensures that the IRS can access complete documentation during audits, reviews, or compliance checks.

Can acceptance agents maintain records electronically instead of on paper?

Certified Acceptance Agents must retain all records related to each ITIN application for three calendar years following the year of submission. For example, if a Form W-7 package is mailed to the IRS in March 2025, all associated records must be preserved until December 31, 2028. This requirement applies to paper and electronic files and ensures that the IRS can access complete documentation during audits, reviews, or compliance checks.

What exactly goes in every client file for a Form W-7?

Each ITIN client file must include a signed Form W-7, a completed Certificate of Accuracy, and copies of all reviewed identification documents. Supporting documents, such as the federal tax return or applicable exception proof, must be added when required. IRS correspondence must also be filed, including CP 565 assignment notices, CP 566 suspense notices, and CP 567 rejection notices. Finally, intake sheets, interview notes, and applicant communications must provide a complete compliance trail.

Who is allowed to sign the Form W-7 COA?

Only a designated responsible party of the Certified Acceptance Agent business can sign the Form W-7 Certificate of Accuracy. This individual must be officially listed on the CAA agreement, complete the required IRS and forensic training, and pass suitability checks. They also must be at least 18 years old and, if applicable, hold a valid Preparer Tax Identification Number. Other employees, alternate contacts, or applicants cannot sign the COA unless designated as responsible parties.

What happens during an IRS compliance review, and how do I prepare?

The agency examines CAA files during an IRS compliance review to ensure all records meet Publication 4520 requirements. Agents may be asked to provide client files, proof of retention, and internal compliance procedures. Preparation involves organizing records, maintaining clear filing systems, and verifying that every file contains complete documentation. Conducting periodic self-audits, training staff, and implementing corrective actions strengthen readiness. By anticipating a review, CAAs demonstrate good faith compliance and reduce the risk of penalties or termination.

What are acceptable identity documents that CAAs can and cannot authenticate?

CAAs may authenticate passports and birth certificates for primary and secondary taxpayers but cannot authenticate all dependent documents. They are authorized to verify most identification documents for primary applicants, except foreign military identification cards. For dependents, CAAs may authenticate only passports and birth certificates; other records, like school or medical documents, must be originals or certified copies. When documents cannot be authenticated, applicants must submit originals directly to the IRS, ensuring compliance with verification standards.

What is the minimum number of Form W-7 applications per year?

Certified Acceptance Agents must submit at least five Form W-7 applications every calendar year to maintain their active agreement with the IRS. If a CAA fails to meet this minimum, the IRS may suspend its participation in the program. A suspended CAA must wait one full year before reapplying, and the reapplication process requires a new submission of documents, training certifications, and suitability checks to regain authorization.