AICPA Applauds Proposed IRS Regulations as a Necessary Step to Combat Tax-Related Identity Theft

March 27, 2013

The American Institute of CPAs (AICPA) applauded regulations proposed by the Internal Revenue Service (IRS) that would make permanent a pilot program to authorize filers of certain information returns to truncate an individual payee’s nine digit identifying number on specified paper payee statements.

“We believe that the proposed regulations are a necessary step in beginning to address the alarming growth in tax-related identity theft cases,” Jeffrey A. Porter, CPA, chair of the AICPA Tax Executive Committee, wrote in a February 20, 2013 letter

“The regulations’ objectives are consistent with taxpayers’ and practitioners’ concerns and questions about the continuing need to receive paper documents that provide a taxpayer’s full Social Security number (SSN),” Porter said.

Porter noted that the AICPA urged the IRS to make the pilot program permanent in a July 18, 2011 comment letter and that the 2011 letter requested extension of the truncation program to permit the use of truncated SSNs on all types of tax forms and returns provided to a client, employee or other recipient. 

Because there may be statutory or other limits placed upon the IRS’s ability to expand the truncation initiative, Porter said the AICPA urges “the Administration to consult with Congress for enactment of legislation to extend the use of truncated SSNs to all types of tax forms and returns provided to a client, employee or other recipient.  The need for this expansive legislation is supported by the growing concern over identity theft in general and the growth in the number of cases being handled by the IRS.”

For background about this topic see the January 3, 2013 story in The Tax Adviser.