IRS Notice 2016-48, released on August 4, 2016, outlines the new procedures by the Protecting Americans from Tax Hikes (PATH) Act.

All ITINs not used on a federal tax return at least once in the last three years will no longer be valid for use on a tax return as of Jan. 1, 2017. Additionally, all ITINs issued before 2013 will begin expiring this year, starting with those with middle digits of 78 and 79 (Example: (9XX-78-XXXX). All expired ITINs must be renewed before being used on a U.S. tax return. No action is needed by ITIN holders who don’t need to file a tax return next year. Also, there are new documentation requirements when applying for or renewing an ITIN for certain dependents.

To renew an expiring ITIN, you must submit a completed Form W-7, Application for IRS Individual Taxpayer Identification Number, and all required identification documents to the IRS. No tax return is required for a renewal application. Mail the application to Internal Revenue Service, ITIN Operation, P.O. Box 149342, Austin, TX 78714-9342.  If you do not want to mail your documents to the IRS, you may be eligible to use an IRS authorized Certified Acceptance Agent (CAA) or make an appointment as a designated IRS Taxpayer Assistance Center (TAC) location.

A return filed with an expired ITIN will be processed, but any exemptions and/or credits claimed applicable to the expired ITIN will not be allowed.  The taxpayer will receive a notice from the IRS explaining the change(s) made to their tax return and that the ITIN must be renewed.  Once the ITIN is renewed, any exemptions and/or credits previously not allowed will be reconsidered at that time.  Until the ITIN is renewed, the taxpayer will be subject to interest and penalties for any tax owed as a result of disallowed exemptions and credits.

Once an ITIN is assigned, it belongs to that taxpayer, unless the ITIN has been revoked. When an individual renews their ITIN, the previously assigned number is renewed.

For more information, please visit the IRS websites, Individual Taxpayer Identification Number & ITIN Expiration Frequently Asked Questions .

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The IRS  released further information on August 8, 2017, explaining the expiration details and Notice CP-48.

ITINs with middle digits 70, 71, 72 or 80 are set to expire at the end of 2017. The notice being mailed -- CP-48 Notices, You must renew your Individual Taxpayer Identification Number (ITIN) to file your U.S. tax return -- explains the steps taxpayers need to take to renew the ITIN if it will be included on a U.S. tax return filed in 2018.
The notices will be issued over a five-week period beginning in early August. Taxpayers who receive the notice but have acted to renew their ITIN do not need to take further steps unless another family member is affected.

Under the Protecting Americans from Tax Hikes (PATH) Act, ITINs that have not been used on a federal tax return at least once in the last three consecutive years will expire Dec. 31, 2017, and as mentioned above, ITINs with middle digits 70, 71, 72 or 80 will also expire at the end of the year. Affected taxpayers who expect to file a tax return in 2018 must submit a renewal application.