[Federal Register Volume 78, Number 4 (Monday, January 7, 2013)]
[Proposed Rules]
[Pages 913-918]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-31745]
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DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Parts 1 and 301
[REG-148873-09]
RIN 1545-BJ16
IRS Truncated Taxpayer Identification Numbers
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Notice of proposed rulemaking and notice of public hearing.
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SUMMARY: This document contains proposed regulations that create a new
taxpayer identifying number known as an IRS truncated taxpayer
identification number, a TTIN. As an alternative to using a social
security number (SSN), IRS individual taxpayer identification number
(ITIN), or IRS adoption taxpayer identification number (ATIN), the
filer of certain information returns may use a TTIN on the
corresponding payee statements to identify the individual 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. These proposed regulations affect filers of
certain information returns who will be permitted to identify an
individual payee by use of a TTIN on the payee statement furnished to
the individual, and those individuals who receive payee statements
containing a TTIN.
DATES: Written or electronic comments must be received by February 21,
2013. Outlines of topics to be discussed at the public hearing
scheduled for March 12, 2013 must be received by February 20, 2013.
ADDRESSES: Send submissions to: CC:PA:LPD:PR (REG-148873-09), Room
5203, Internal Revenue Service, PO Box 7604, Ben Franklin Station,
Washington, DC 20044. Submissions may be hand delivered Monday through
Friday between the hours of 8 a.m. and 4 p.m. to: CC:PA:LPD:PR (REG-
148873-09), Courier's Desk, Internal Revenue Service, 1111 Constitution
Avenue NW., Washington, DC 20224 or sent electronically, via the
Federal eRulemaking Portal at http://www.regulations.gov (IRS REG-
148873-09). The public hearing will be held in the Internal Revenue
Service Auditorium, Internal Revenue Service, 1111 Constitution Avenue
NW., Washington, DC 20224.
FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations,
Tammie A. Geier, (202) 622-3620; concerning submissions of comments,
the public hearing, and/or to be placed on the building access list to
attend the public hearing, Oluwafunmilayo Taylor of the Publications
and Regulations Branch at (202) 622-7180 (not toll-free numbers).
SUPPLEMENTARY INFORMATION:
Background
This document contains proposed amendments to the Income Tax
Regulations (26 CFR Part 1) and the Procedure and Administration
Regulations (26 CFR Part 301). These amendments implement the pilot
program announced in Notice 2009-93 (2009-51 IRB 863), extended and
modified in Notice 2011-38 (2011-20 IRB 785), which together authorized
filers of certain information returns to truncate an individual payee's
nine-digit identifying number on specified paper payee statements
furnished for calendar years 2009 through 2012. See Sec.
601.601(d)(2).
The pilot program was implemented in response to concerns about the
risk of identity theft stemming from the inclusion of a taxpayer
identifying number on a payee statement. In particular, the risks of
misappropriation and subsequent misuse of that number were reported to
be greatest with respect to paper payee statements.
I. Information Reporting
Information returns are returns, statements, forms, or other
documents that must be filed with the IRS to report transactions (for
example, payments, distributions, or transfers) with another person in
a calendar year. Section 6724(d)(1); Treas. Reg. Sec. 301.6721-
1(g)(1). Persons required to file information returns with the IRS are
[[Page 914]]
filers. Treas. Reg. Sec. 301.6721-1(g)(6). Generally, filers must
furnish a statement to the person on the other side of the
transaction--the payee--containing the information shown on the
information return filed with the IRS. See Treas. Reg. Sec. 301.6721-
1(g)(5) (defining ``payee'' for purposes of sections 6721 and 6722).
The payee may be the recipient of a payment (as referred to on Copy B
of Form 1099-MISC, ``Miscellaneous Income''), a plan participant
receiving distributions (as referred to on Copy B of Form 1099-R,
``Distributions from Pensions, Annuities, Retirement or Profit-Sharing
Plans, IRAs, Insurance Contracts, Etc.''), a transferor selling or
exchanging real estate (as referred to on Copy B of Form 1099-S,
``Proceeds from Real Estate Transactions''), a payer/borrower making
interest payments (as referred to on Copy B of Form 1098, ``Mortgage
Interest Statement''), a debtor whose debt was discharged, canceled or
forgiven (as referred to on Copy B of Form 1099-C, ``Cancellation of
Debt''), or a student receiving scholarships, grants or qualified
tuition (as referred to on Copy B of Form 1098-T, ``Tuition
Statement''). The statement furnished to the payee is referred to as a
payee statement. Section 6724(d)(2); Treas. Reg. Sec. 301.6722-
1(d)(2). In certain circumstances, persons required to file information
returns may file substitute forms with the IRS and furnish substitute
form statements to payees rather than use the official IRS forms. Rev.
Proc. 2011-60. See Sec. 601.601(d)(2).
II. Taxpayer Identifying Numbers
Section 6011(a) requires, in part, that every person required to
make a return or statement shall include therein the information
required by forms or regulations. Regulations, forms, or instructions
to forms may require that the filer of an information return include
the identifying number of the payee on the corresponding payee
statement.
Section 6109(a) authorizes the Secretary to prescribe regulations
with respect to the inclusion in returns, statements, or other
documents of an identifying number as may be prescribed for securing
proper identification of a person. A taxpayer identifying number is
also referred to as a TIN, which section 7701(a)(41) defines as the
identifying number assigned to a person under section 6109.
Section 6109(a)(3) generally provides that any person required to
make a return, statement, or other document with respect to another
person shall request from the other person, and shall include in the
return, statement, or other document, the identifying number as may be
prescribed for securing proper identification of the other person.
Thus, for information reporting purposes, a filer of an information
return must request a TIN from the payee and include the TIN on the
information return.
Flush language in section 6109(a) states that the identifying
number of an individual (or the individual's estate) is the
individual's social security account number. Section 6109(d) provides
that, except as otherwise specified under regulations, the social
security account number issued to an individual under the Social
Security Act is the identifying number for individuals for purposes of
the Code. Regulations provide that the principal types of taxpayer
identifying numbers are SSNs, ITINs, ATINs, and employee identification
number (EINs). Treas. Reg. Sec. 301.6109-1(a)(1)(i). SSNs, ITINs, and
ATINs are used to identify individuals. Treas. Reg. Sec. 301.6109-
1(a)(1)(ii). An EIN is used to identify an individual or other person
(whether or not an employer). Treas. Reg. Sec. 301.7701-12.
Summary of Comments
Comments received in response to the Notices, and other feedback
from the payor community, reflect that filers' participation in the
pilot was positive. Some filers, however, noted a few limitations that
prevented participation. Several commentators suggested expanding the
pilot program by recommending that truncation be authorized on a
greater number of payee statements, that truncation be permitted on
electronically furnished payee statements, and that filers be permitted
to truncate an individual payee's EIN in addition to the other types of
taxpayer identifying numbers (SSNs, ITINs, and ATINs) included in the
pilot program. A permanent voluntary program was encouraged, rather
than a mandatory program. Other commentators suggested that taxpayers
could be adversely affected by the truncation of their identifying
numbers on payee statements due to the inability to identify errors in
the first five masked digits. Also, some state tax authorities stated
that the truncation of taxpayer identifying numbers on Federal payee
statements that are attached to state income tax returns might hamper
state income tax processing. Treasury and the IRS gave serious
consideration to the state government concerns, but concluded that
truncation is unlikely to hamper state income tax return processing
significantly because the vast majority of payee statements attached to
state returns are Forms W-2, which are not subject to the truncation
program, and because payee information is available to the states
through data sharing programs with the Federal government.
All comments were considered in developing the regulations that, as
proposed, create a permanent truncation program. The proposed
regulations expand the scope of the pilot program so that filers are
permitted to furnish payee statements by electronic means. With regard
to including a greater number of payee statements, the pilot program
and, therefore, the proposed regulations are limited in scope by
statute. For example, section 6051(a)(2) requires that the written
statement furnished to employees (Form W-2, ``Wage and Tax Statement'')
show the name of the employee ``and his social security account
number.'' Accordingly, these proposed regulations do not expand the
number of payee statements included beyond those included in the pilot
program.
Some commentators reported that the inability to truncate a payee's
EIN on a payee statement resulted in their inability to participate in
the pilot program. As described in the comments, some filers could not
differentiate the type of identifying number assigned to a payee and/or
could not differentiate numbers belonging to individuals. As explained
in the comments, the affected filers, because of software limitations,
could either truncate all payee identifying numbers, including EINs
(whether assigned to an individual or a corporation, for example), or
none at all. The IRS believes the misuse of EINs is less frequently an
element of identity theft. As these regulations are proposed in
response to the risk of identity theft stemming from the inclusion of
an individual's taxpayer identifying number on a payee statement, these
proposed regulations do not permit truncation for numbers that may be
assigned to taxpayers other than individuals. The IRS seeks further
comments regarding the number of filers who are unable to differentiate
EINs from payee identifying numbers belonging to individuals and the
feasibility of making software changes to address this issue.
Some commentators explained that their systems could not readily
accommodate truncation (as exemplified above with respect to EINs) and
that filers of information returns have varying volume and procedures.
Accordingly, participation in the truncation program proposed by the
regulations is voluntary.
[[Page 915]]
Explanation of Provisions
These proposed regulations create and allow filers of certain
information returns to use an IRS truncated taxpayer identification
number, a TTIN, to identify individuals on the payee statements
corresponding to those information returns. The proposed regulations
provide that the TTIN may be used in lieu of a payee's SSN, ATIN, or
ITIN, but use of a TTIN is not mandatory. A TTIN may be used only on a
payee statement and may be used on payee statements furnished by paper
or electronic means. A filer may not use a TTIN on an information
return filed with the IRS. A filer may not truncate its own identifying
number on information returns or payee statements. A filer may not
truncate a payee's EIN under the proposed regulations.
The payee statements on which TTINs may be included are the same
statements included in the current pilot program in Notice 2011-38. The
current pilot program includes all statements in the Forms 1099, 1098,
and 5498 series, with the exception of Form 1098-C, Contributions of
Motor Vehicles, Boats, and Airplanes, because that form is not a payee
statement but an ``acknowledgement.'' Any subsequent changes to the
list will appear in published guidance.
These proposed regulations also amend certain existing regulations
under sections 6042, 6043, 6044, 6045, 6049, 6050A, 6050E, 6050N,
6050P, and 6050S to specifically authorize the use of TTINs on payee
statements furnished under those sections. Those regulations set forth
requirements for payee statements that could be read as inconsistent
with the use of TTINs to identify payees, in some cases requiring that
the payee be furnished a copy of the information return filed with the
IRS. Other information reporting regulations that do not contain
provisions contradictory to the use of TTINs are not being updated in
these proposed regulations.
Many of the regulations governing the furnishing of payee
statements do not provide for the use of substitute statements. These
regulations are not being revised to address substitute statements at
this time. For information regarding substitute statements, see Rev.
Proc. 2011-60 (2011-52 IRB 934) (or its successor), republished as
Publication 1179, ``General Rules and Specifications for Substitute
Forms 1096, 1098, 1099, 5498, and Certain Other Information Returns.''
Rev. Proc. 2011-60 also contains rules for electronic delivery of payee
statements. Provisions relating to the use of TTINs in electronically
furnished payee statements, if any, will be included in successor
revenue procedures to Rev. Proc. 2011-60. See Sec. 601.601(d)(2).
Proposed Effective and Applicability Dates
These regulations are proposed to take effect when published in the
Federal Register as final regulations. The rules in these proposed
regulations may be relied upon by the affected filers before the
publication of the Treasury decision.
Effect on Other Documents
The following publication will be obsolete as of the date this
notice of proposed rulemaking is published as final regulations in the
Federal Register:
Notice 2011-38, 2011-20 IRB 785.
Special Analyses
It has been determined that these regulations are not a significant
regulatory action as defined in Executive Order 12866, as supplemented
by Executive Order 13563. Therefore, a regulatory assessment is not
required. It also has been determined that section 553(b) of the
Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to
these regulations and, because the regulations do not impose a
collection of information on small entities, the Regulatory Flexibility
Act (5 U.S.C. chapter 6) does not apply. Pursuant to section 7805(f),
these regulations have been submitted to the Chief Counsel for Advocacy
of the Small Business Administration for comment on their impact on
small business.
Comments and Public Hearing
Before these proposed regulations are adopted as final regulations,
consideration will be given to any written (a signed original and eight
(8) copies) or electronic comments that are submitted timely to the
IRS. The Treasury Department and the IRS request comments on all
aspects of the proposed regulations. The Treasury Department and the
IRS specifically request comments on issues encountered by filers and
payees alike, whether filers should be permitted to truncate a payee's
EIN and, if so, why and whether truncation should be permitted on
additional types of payee statements. The Treasury Department and the
IRS further request that filers provide details as to whether the
exclusion of EINs from these regulations prevents them from using TTINs
at all. All comments submitted by the public will be made available for
public inspection and copying.
A public hearing has been scheduled for February 21, 2013 beginning
at 10:00 a.m., in the Internal Revenue Service Auditorium, Internal
Revenue Service, 1111 Constitution Avenue NW., Washington, DC 20224.
Due to building security procedures, visitors must enter through the
Constitution Avenue entrance. In addition, all visitors must present
photo identification to enter the building. Because of access
restrictions, visitors will not be admitted beyond the immediate
entrance area more than 30 minutes before the hearing starts. For
information about having your name placed on the building access list
to attend the hearing, see the FOR FURTHER INFORMATION CONTACT section
of this preamble.
The rules of 26 CFR 601.601(a)(3) apply to the hearing. Persons who
wish to present oral comments at the hearing must submit written or
electronic comments by February 21, 2013 and an outline of the topics
to be discussed and the time to be devoted to each topic (a signed
original and eight (8) copies) by February 20, 2013. A period of ten
minutes will be allotted to each person for making comments. An agenda
showing the scheduling of speakers will be prepared after the deadline
for receiving outlines has passed. Copies of the agenda will be
available free of charge at the hearing.
Drafting Information
The principal author of these regulations is Tammie A. Geier of the
Office of the Associate Chief Counsel (Procedure and Administration).
List of Subjects
26 CFR Part 1
Income taxes, Reporting and recordkeeping requirements.
26 CFR Part 301
Employment taxes, Estate taxes, Excise taxes, Gift taxes, Income
taxes, Penalties, Reporting and recordkeeping requirements.
Proposed Amendments to the Regulations
Accordingly, 26 CFR parts 1 and 301 are proposed to be amended as
follows:
PART 1--INCOME TAXES
0
Paragraph 1. The general authority citation for part 1 continues to
read as follows:
Authority: 26 U.S.C. 7805 * * *
0
Par. 2. Section 1.6042-4 is amended by revising paragraph (b) to read
as follows:
[[Page 916]]
Sec. 1.6042-4 Statements to recipients of dividend payments.
* * * * *
(b) Form and content of the statement. The statement required by
paragraph (a) of this section must be either the official Form 1099
prescribed by the Internal Revenue Service for the respective calendar
year or an acceptable substitute statement that contains provisions
that are substantially similar to those of the official Form 1099 for
the respective calendar year. For further guidance on how to prepare an
acceptable substitute statement, see Rev. Proc. 2011-60 (or its
successor) republished as Publication 1179, ``General Rules and
Specifications for Substitute Forms 1096, 1098, 1099, 5498, and Certain
Other Information Returns.'' See Sec. 601.601(d)(2) of this chapter.
An IRS truncated taxpayer identifying number (TTIN) may be used as the
identifying number for an individual recipient. For provisions relating
to the use of TTINs, see Sec. 301.6109-4 of this chapter (Procedure
and Administration Regulations).
* * * * *
0
Par. 3. Section 1.6043-4 is amended by adding two new sentences to the
end of paragraph (b)(4) to read as follows:
Sec. 1.6043-4 Information returns relating to certain acquisitions of
control and changes in capital structure.
* * * * *
(b) * * *
(4) * * * An IRS truncated taxpayer identifying number (TTIN) may
be used as the identifying number for an individual shareholder in lieu
of the identifying number appearing on the Form 1099-CAP filed with the
Internal Revenue Service. For provisions relating to the use of TTINs,
see Sec. 301.6109-4 of this chapter (Procedure and Administration
Regulations).
* * * * *
0
Par. 4. Section 1.6044-5 is amended by adding two new sentences to the
end of paragraph (b) to read as follows:
Sec. 1.6044-5 Statements to recipients of patronage dividends.
* * * * *
(b) * * * An IRS truncated taxpayer identifying number (TTIN) may
be used as the identifying number for an individual recipient in lieu
of the identifying number appearing on the corresponding information
return filed with the Internal Revenue Service. For provisions relating
to the use of TTINs, see Sec. 301.6109-4 of this chapter (Procedure
and Administration Regulations).
* * * * *
0
Par. 5. Section 1.6045-2 is amended by adding two new sentences to the
end of paragraph (c) to read as follows:
Sec. 1.6045-2 Furnishing statement required with respect to certain
substitute payments.
* * * * *
(c) * * * An IRS truncated taxpayer identifying number (TTIN) may
be used as the identifying number for an individual customer in lieu of
the identifying number appearing on the information return filed with
the Internal Revenue Service. For provisions relating to the use of
TTINs, see Sec. 301.6109-4 of this chapter (Procedure and
Administration Regulations).
* * * * *
0
Par. 6. Section 1.6045-3 is amended by adding two new sentences to the
end of paragraph (e)(1) to read as follows:
Sec. 1.6045-3 Information reporting for an acquisition of control or
a substantial change in capital structure.
* * * * *
(e) * * *
(1) * * * An IRS truncated taxpayer identifying number (TTIN) may
be used as the identifying number for an individual customer. For
provisions relating to the use of TTINs, see Sec. 301.6109-4 of this
chapter (Procedure and Administration Regulations).
* * * * *
0
Par. 7. Section 1.6045-4 is amended by revising paragraph (m)(1) to
read as follows:
Sec. 1.6045-4 Information reporting on real estate transactions with
dates of closing on or after January 1,1991.
* * * * *
(m) * * *
(1)(i) Requirement of furnishing statements. A reporting person who
is required to make a return of information under paragraph (a) of this
section shall furnish to the transferor whose TIN is required to be
shown on the return a written statement of the information required to
be shown on such return. The written statement must bear either the
legend shown on the recipient copy of Form 1099 or the following: This
is important tax information and is being furnished to the Internal
Revenue Service. If you are required to file a return, a negligence
penalty or other sanction may be imposed on you if this item is
required to be reported and the IRS determines that it has not been
reported.
(ii) This requirement may be satisfied by furnishing to the
transferor a copy of a completed Form 1099 (or substitute Form 1099
that complies with current revenue procedures). An IRS truncated
taxpayer identifying number (TTIN) may be used as the identifying
number for an individual transferor in lieu of the identifying number
appearing on the information return filed with the Internal Revenue
Service. For provisions relating to the use of TTINs, see Sec.
301.6109-4 of this chapter (Procedure and Administration Regulations).
(iii) In the case of a real estate transaction for which a Uniform
Settlement Statement is used, this requirement also may be satisfied by
furnishing to the transferor a copy of a completed statement that is
modified to comply with the requirements of this paragraph (m), and by
designating on the Uniform Settlement Statement the items of
information (such as gross proceeds or allocated gross proceeds)
required to be set forth on the Form 1099. For purposes of this
paragraph (m), a statement shall be considered furnished to a
transferor if it is given to the transferor in person, either at the
closing or thereafter, or is mailed to the transferor at the
transferor's last known address.
* * * * *
0
Par. 8. Section 1.6045-5 is amended by adding two sentences before the
last sentence of paragraph (a)(3)(i) to read as follows:
Sec. 1.6045-5 Information reporting on payments to attorneys.
(a) * * *
(3) * * *
(i) * * * An IRS truncated taxpayer identifying number (TTIN) may
be used as the identifying number for an individual attorney in lieu of
the identifying number appearing on the information return filed with
the Internal Revenue Service. For provisions relating to the use of
TTINs, see Sec. 301.6109-4 of this chapter (Procedure and
Administration Regulations). * * *
* * * * *
0
Par. 9. Section 1.6049-6 is amended by adding paragraph (b)(3) to read
as follows:
Sec. 1.6049-6 Statements to recipients of interest payments and
holders of obligations for attributed original issue discount.
* * * * *
(b) * * *
(3) With respect to both statements to persons receiving payments
of interest and persons holding obligations, the statement shall
include the name, address, and taxpayer identifying number of such
person. An IRS truncated taxpayer identifying number (TTIN) may be used
as the identifying
[[Page 917]]
number for an individual person. For provisions relating to the use of
TTINs, see Sec. 301.6109-4 of this chapter (Procedure and
Administration Regulations).
* * * * *
0
Par. 10. Section 1.6050A-1 is amended by adding two sentences to the
end of paragraph (c)(1) to read as follows:
Sec. 1.6050A-1 Reporting requirements of certain fishing boat
operators.
* * * * *
(c) * * *
(1) * * * An IRS truncated taxpayer identifying number (TTIN) may
be used as the identifying number for the individual in lieu of the
identifying number appearing on the information return filed with the
Internal Revenue Service. For provisions relating to the use of TTINs,
see Sec. 301.6109-4 of this chapter (Procedure and Administration
Regulations).
* * * * *
0
Par. 11. Section 1.6050E-1 is amended by adding two sentences to the
end of paragraph (k)(1) to read as follows:
Sec. 1.6050E-1 Reporting of State and local income tax refunds.
* * * * *
(k) * * *
(1) * * * An IRS truncated taxpayer identifying number (TTIN) may
be used as the identifying number for the individual in lieu of the
identifying number appearing on the information return filed with the
Internal Revenue Service. For provisions relating to the use of TTINs,
see Sec. 301.6109-4 of this chapter (Procedure and Administration
Regulations).
* * * * *
0
Par. 12. Section 1.6050N-1 is amended by adding two sentences to the
end of paragraph (b) to read as follows:
Sec. 1.6050N-1 Statements to recipients of royalties paid after
December 31, 1986.
* * * * *
(b) * * * An IRS truncated taxpayer identifying number (TTIN) may
be used as the identifying number for an individual recipient. For
provisions relating to the use of TTINs, see Sec. 301.6109-4 of this
chapter (Procedure and Administration Regulations).
* * * * *
0
Par. 13. Section 1.6050P-1 is amended by:
0
a. Removing ``section;'' from paragraph (f)(1)(i) and adding
``section.'' in its place; and
0
b. Adding two sentences to the end of paragraph (f)(1)(i) to read as
follows:
Sec. 1.6050P-1 Information reporting for discharges of indebtedness
by certain entities.
* * * * *
(f) * * *
(1) * * *
(i) * * * An IRS truncated taxpayer identifying number (TTIN) may
be used as the TIN of an individual for whom there was an identifiable
event in lieu of the identifying number appearing on the information
return filed with the Internal Revenue Service. For provisions relating
to the use of TTINs, see Sec. 301.6109-4 of this chapter (Procedure
and Administration Regulations);
* * * * *
0
Par. 14. Section 1.6050S-1 is amended by:
0
a. Removing ``section;'' from paragraph (c)(1)(i) and adding
``section.'' in its place; and
0
b. Adding two sentences to the end of paragraph (c)(1)(i) to read as
follows:
Sec. 1.6050S-1 Information reporting for qualified tuition and
related expenses.
* * * * *
(c) * * *
(1) * * *
(i) * * * An IRS truncated taxpayer identifying number (TTIN) may
be used as the TIN for the individual in lieu of the identifying number
appearing on the information return filed with the Internal Revenue
Service. For provisions relating to the use of TTINs, see Sec.
301.6109-4 of this chapter (Procedure and Administration Regulations);
* * * * *
0
Par. 15. Section 1.6050S-3 is amended by:
0
a. Removing ``section;'' from paragraph (d)(1)(i) and adding
``section.'' in its place; and
b. Adding two sentences to the end of paragraph (d)(1)(i) to read
as follows:
Sec. 1.6050S-3 Information reporting for payments of interest on
qualified education loans.
* * * * *
(d) * * *
(1) * * *
(i) * * * An IRS truncated taxpayer identifying number (TTIN) may
be used as the TIN for the individual payor in lieu of the identifying
number appearing on the information return filed with the Internal
Revenue Service. For provisions relating to the use of TTINs, see Sec.
301.6109-4 of this chapter (Procedure and Administration Regulations).
* * * * *
PART 301--PROCEDURE AND ADMINISTRATION
0
Par. 16. The authority citation for part 301 continues to read as
follows:
Authority: 26 U.S.C. 7805.
0
Par. 17. Section 301.6109-4 is added to read as follows:
Sec. 301.6109-4 IRS truncated taxpayer identification numbers.
(a) In general--(1) Definition. An IRS truncated taxpayer
identification number (TTIN) is an individual's social security number
(SSN), IRS individual taxpayer identification number (ITIN), or IRS
adoption taxpayer identification number (ATIN) that is truncated by
replacing the first five digits of the nine-digit number with Xs or
asterisks. The TTIN is shown in the format XXX-XX-1234 or ***-**-1234.
(2) Use of a TTIN. (i) A TTIN may be used by a filer of certain
information returns to identify an individual on the corresponding
payee statement furnished to the individual, as authorized by
regulations, forms or form instructions, or other guidance published by
the Internal Revenue Service. A TTIN may not be used on payee
statements corresponding to the Form W-2 series, the Form 1098-C
(Contributions of Motor Vehicles, Boats, and Airplanes), or where
identification of a taxpayer by an SSN, ITIN, or ATIN is mandated by
statute.
(ii) A TTIN cannot be used by a filer on any information return
filed with the Internal Revenue Service.
(iii) A TTIN may only be used for identifying individuals assigned
SSNs, ITINs, or ATINs.
(iv) A filer may not truncate its own taxpayer identifying number
on any document.
(v) Use of a TTIN is permissive and not mandatory.
(b) Definitions--(1) Filer. A filer means a person who is required
to report a transaction to the Internal Revenue Service on an
information return.
(2) Information return. An information return means the returns,
statements, forms, or other documents that businesses must file with
the Internal Revenue Service to report transactions with other persons.
(3) Payee statement. A payee statement means the copy of the
information set forth on an information return filed with the IRS that
is furnished to the individual payee, recipient, participant,
transferor, payer/borrower, debtor, or student, depending upon the
specific reporting requirements.
[[Page 918]]
(c) Effective/applicability date. This section applies after the
date of publication of the Treasury decision adopting these rules as
final regulations in the Federal Register. The rules in these proposed
regulations may be relied upon by the affected filers prior to the
publication of final regulations.
Steven T. Miller,
Deputy Commissioner for Services and Enforcement.
[FR Doc. 2012-31745 Filed 1-2-13; 4:15 pm]
BILLING CODE 4830-01-P