Tax & Accounting Blog

TIN truncation on Form 1099 payee statements will continue under new proposed regulations

1099, ONESOURCE, Tax Information Reporting, Trust Tax January 14, 2013

Bird House

The IRS has published proposed new tax regulations for truncating taxpayer identification numbers on the recipient statements for Forms 1099 – including the expansion of TIN truncation to include not only paper 1099 statements, but also 1099 statements furnished electronically.  However, the proposed regulations limit TIN truncation to social security numbers (SSNs), individual taxpayer identification numbers (ITINs) and adoption taxpayer identification numbers (ATINs).  Under the regulations as proposed, truncation of employer identification numbers (EINs) still would not be permitted.

The proposed regulations, REG-148873-09, provide for the truncation or “masking” of taxpayer ID numbers by showing only the last four digits of an individual’s identifying number, in the format XXX-XX-1234 or ***-**-1234.  This is the same truncated format permitted on recipient statements for 2009 through 2012 under a pilot program authorized by IRS Notices 2009-93 and 2011-38.  The proposed regulations give this format a new name: the Truncated Taxpayer Identification Number (TTIN).  

The pilot program only permitted truncation on paper statements, but REG-148873-09 permits truncation on paper and electronic statements.  The proposed regulations provide that the TTIN may be used in lieu of a payee’s SSN, ATIN, or ITIN.  Use of a TTIN is not mandatory.   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.   

The payee statements on which TTINs may be included are the same statements included in the current pilot program: 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.” 

A public hearing on the proposed TTIN regulations will be held on March 12, 2013.