IRS Proposes Regulations Creating Truncated Taxpayer ID Number (NPRM REG-148873-09)

The IRS has proposed regulations creating a new taxpayer identification number, which would be known as a truncated taxpayer identification number, or TTIN. This number would be available as an alternative to the Social Security number, the IRS individual taxpayer identification number, or the IRS adoption taxpayer identification number for use by the filer of certain information returns to identify the person being furnished a statement. The TTIN displays only the last four digits of an individual’s identifying number and is shown in the format XXX-XX-1234 or ***-**-1234.

Code Sec. 6109 authorizes the IRS to require the inclusion of an identifying number in returns, statements, or other documents as a means of securing proper identification of the filer. The IRS announced a pilot program in Notice 2009-93 , I.R.B. 2009-51, 863, extended and modified in Notice 2011-38 , I.R.B. 2011-20, 785, which authorized filers of certain information returns to truncate an individual payee’s nine-digit identifying number on specified paper payee statements furnished for 2009 through 2012. The proposed regulations would implement this program, which was conceived in response to concerns about the risk of identity theft. The risk of misappropriation and subsequent misuse of identification numbers has been reported to be a significant problem with paper payee statements.

Commonly used payee statements for which paper copies are issued include Forms 1098 (Mortgage Interest Statement), 1099-MISC (Miscellaneous Income), 1099-R (Distributions from Pensions, Annuities, Retirement or Profit-Sharing Plans, IRS, Insurance Contracts, Etc.), 1099-S (Proceeds from Real Estate Transactions), 1099-C (Cancellation of Debt) and 1098-T (Tuition Statement). The TTIN would not be used on Form W-2 (Wage and Tax Statement), which requires the employee’s name and Social Security number, nor is truncation possible for any number assigned to taxpayers other than individuals, such as an employer identification number.

The TTIN may be used only on payee statements, whether furnished by paper or electronic means. Its use is optional. A filer may not use a TTIN on an information return filed with the IRS, nor may a filer truncate its own identifying number of information returns or payee statements. Notice 2011-38 will be obsolete on the date these proposed regulations become final.

Proposed Regulations, NPRM REG-148873-09, 2013FED ¶49,558

Other References:

Code Sec. 6042

CCH Reference – 2013FED ¶35,867C

Code Sec. 6043

CCH Reference – 2013FED ¶35,885CC

Code Sec. 6044

CCH Reference – 2013FED ¶35,909C

Code Sec. 6045

CCH Reference – 2013FED ¶35,926BC

CCH Reference – 2013FED ¶35,926DC

CCH Reference – 2013FED ¶35,929AC

CCH Reference – 2013FED ¶35,929BC

Code Sec. 6049

CCH Reference – 2013FED ¶36,033C

Code Sec. 6050A

CCH Reference – 2013FED ¶36,041C

Code Sec. 6050E

CCH Reference – 2013FED ¶36,121C

Code Sec. 6050N

CCH Reference – 2013FED ¶36,300BC

Code Sec. 6050P

CCH Reference – 2013FED ¶36,311BC

Code Sec. 6050S

CCH Reference – 2013FED ¶36,319AE

CCH Reference – 2013FED ¶36,319AK

Code Sec. 6109

CCH Reference – 2013FED ¶36,964I

Tax Research Consultant

CCH Reference – TRC FILEBUS: 12,106.15


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