The Internal Revenue Service (IRS) issued final regulations on July 14 to allow the use of truncated Social Security numbers and other taxpayer identification numbers on payee information statements and to allow the payee statement to be submitted electronically, changes that the American Institute of CPAs has urged for several years in comment letters to the IRS and in testimony before Congress and in a statement to the IRS Oversight Board.
In T.D. 9675, the IRS said a truncated taxpayer identification number (TTIN) may be used “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. These regulations affect persons that furnish or receive payee statements and other documents that the Internal Revenue Code, regulations, or other published guidance requires to be furnished to another person to the extent that a TTIN may appear in lieu of the SSN, ITIN, ATIN, or EIN of the payee or document recipient.”
In testimony before the Senate Finance Committee in April 2013, Jeffrey A. Porter, CPA, chair of the AICPA’s Tax Executive Committee, said that the AICPA was pleased the IRS had included in proposed regulations, which were issued in January 2013, the AICPA’s 2011 recommendation to make permanent an IRS pilot program allowing truncated Social Security numbers on some reporting forms.
Porter also told Congress it should change the law so that truncated Social Security numbers can be used more widely. “We urge Congress to permit truncation of Social Security numbers on all copies of W-2s other than the copy filed with the Social Security Administration,” Porter said. Congress has not yet made the change, but the AICPA will continue to advocate for it.
For more information about the AICPA’s support for using truncated Social Security numbers, read the AICPA’s Feb. 20, 2013 IRS comment letter and the AICPA’s May 1, 2013 press release about the statement to the IRS Oversight Board.
For more information about the final IRS regulations, read the July 14 Journal of Accountancy article.