What is an SSN (Social Security Number)?
Summary
Find out why an SSN (Social Security Number) is essential for your U.S. tax return and how to apply for one.
Because of U.S. law FATCA, banks and financial institutions are required to forward information, including the SSN, of their U.S. customers to the U.S. Internal Revenue Service.
What do you need to know and what can you do?
What is an SSN (Social Security Number)?
A Social Security Number (SSN) is similar to the tax number in the country where you reside. In the Netherlands, this is the BSN (burgerservicenummer). In America, a US person can only file a tax return with an SSN. This number is also sometimes called a T.I.N. (Taxpayer Identification Number).
How to apply for an SSN?
To apply for an SSN (Social Security Number), contact the American Consulate. The application is usually processed by the American Embassy in Dublin. Even if you are unsure whether you have ever received an SSN or if you have lost your SSN, you should contact the consulate. The process can take a long time and require a lot of paperwork. It can make a difference whether you were born in the US or the Netherlands, Belgium, and Luxembourg. If you were born in the US, it often takes longer to receive the SSN. (More information on applying for a Social Security Number can be found here: Apply for SSN)
Banks and SSN
In 2010, the American law FATCA (Foreign Account Tax Compliance Act) was introduced. This law requires all foreign financial institutions to report their American customers to the US, under threat of heavy fines.
In response to this law, banks send letters to customers they know or suspect are American. If people confirm that they are a US person, their details are forwarded to the American tax authorities IRS. The same happens if there is no response to the letter. The banks then assume that the customer holds American citizenship and forward the details.
A part of the FATCA law requires banks to provide a Social Security Number (SSN) for all their American customers, or else they risk fines. As a result, many banks are increasingly refusing American customers who do not provide an SSN/TIN and are preemptively closing their accounts to avoid problems.
What should I do now?
If you have received a letter from the bank, we advise you to respond to it and return it filled out. If you do not have a Social Security Number at the time of the letter, you can send the letter back without the SSN and then apply for the SSN.
If the bank requests it, you can possibly send the SSN application form (as proof that you are in the process of applying).
If you have not received a letter, you can inform the bank about your US person status (with or without an SSN), but it is not required as far as we know. We have not yet discovered if this is an obligation imposed by a bank or regulator on consumers. No rights can be derived from this because the law is too complex and the conditions vary per bank.
Note: Ultimately, make the decision yourself or first consult a tax expert.
If you are unsure whether you are a US person or have an obligation, you can always contact us for free and non-binding advice.
Tax and filing obligations in America
America is the only developed country with a tax and filing obligation for US persons who do not live or work there. Banks provide limited information on this because they do not want to end up in an advisory role. We therefore recommend that you get your tax return in order if you haven’t already. This is because more and more information is ending up with the IRS in America. Usually, no tax is due. If you have never filed a tax return, you can do so via the so-called Streamlined Procedure.
Get more information about your SSN from Americans Overseas
We, the founders of Americans Overseas, were born in the Netherlands and obtained our American nationality through our (American) mother.
When we heard about the US tax system for the first time around 2013, we were in total disbelief (it can’t be true!), anger (how can they do this?), fear (am I going to get fined or pick up other problems?), and panic (what should I do?). It is (unfortunately) true that there is an additional American tax levy. But there’s no information from the local government, and when approached, the consulate referred us to the IRS, and the IRS was impenetrable.
That’s why we started this initiative to help people from all over the world by providing proper information about the US tax system to avoid unnecessary panic and offering help free of obligation and free of charge. If needed, we have a network of affordable professionals (accountants) who can help you with your American tax obligations.
Contact us for more information
Knowledge Center Americans Overseas
Written by Linda Mabelis
General Manager & Partner
Linda Mabelis is the General Manager and Owner at Americans Overseas, dedicated to helping individuals find the right tax attorney for their unique situations. With extensive work experience and a deep understanding of the complexities facing Americans Overseas, Linda is committed to providing personalized and effective solutions.
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