IRS Issues Final Regs On Truncated TINs
As part of efforts to combat identity theft and tax refund fraud, the United States Treasury Department has released, in the Federal Registry, final regulations applicable to the use of Internal Revenue Service (IRS) truncated taxpayer identification numbers (TTINs).
To reduce the risk of identity theft, the regulations allow (where not otherwise prohibited) for the use of a TTIN in lieu of a taxpayer’s social security number (SSN), IRS individual taxpayer identification number (ITIN), IRS adoption taxpayer identification number (ATIN) or employer identification number (EIN) on payee statements and certain other documents.
The TTIN displays only the last four digits of a taxpayer identifying number; either asterisks or Xs replace the first five digits of the identifying number, and the regulations therefore affect persons that furnish or receive tax-related documents, to the extent that a TTIN may appear in lieu of the SSN, ITIN, ATIN or EIN of the payee or document recipient.
A particular change from the proposed regulations issued in 2013, which previously permitted the use of a TTIN only if affirmatively authorized by the IRS, and was felt to unduly limit the documents on which TTINs could be used (which in turn would reduce the effect of using TTINs to help combat identity theft), is that TTINs are now allowed to be used unless prohibited.
Under this modified approach, there is no need to amend every information reporting regulation to permit the use of a TTIN. However, the final regulations still retain the rule that TTINs may not be used on a return filed with the IRS. It is considered that full ITINs on returns and statements filed with the IRS are necessary for the agency to determine compliance with the tax laws and to validate the information provided.
Source: tax-news
