The IRS has issued final rules that will allow filers of information returns to truncate a taxpayer's identification number on payee statements and other documents, instead of having to use Social Security numbers or employer identification numbers. The truncated numbers display only the last four digits of the identifying number, with either asterisks or Xs replacing the first five digits of the number.
The final rules (T.D. 9675), squarely aimed at mitigating identity theft, authorize the use of a truncated taxpayer identification number (TTIN) on payee statements and other documents that are furnished to another person. The TTINs can also be used in place of individual taxpayer identification numbers and adoption taxpayer identification numbers, the IRS said in a release of the final rules July 14.
The final rules permit use of a TTIN on any federal tax-related payee statement or other document required to be furnished to another person unless prohibited by the Internal Revenue Code, regulations or other guidance published in the Internal Revenue Bulletin, forms or instructions.
To avoid confusion, the final rules retained provisions in REG-148873-09 that amended specific information reporting requirements that could be interpreted as requiring use of an unmasked Social Security number, individual taxpayer identification numbers, adoption taxpayer identification number, or employer identification number.
The final regulations also list the circumstances when use of a TTIN isn't permitted. For example, a taxpayer may not truncate its own taxpayer identification number on any tax form, statement, or other document that a person furnishes to another person, according to the final rules. Amendments to the specific information-reporting regulations are generally effective for payee statements due after Dec. 31, 2014, the IRS said.
