Source: https://www.federalregister.gov/documents/2013/01/07/2012-31745/irs-truncated-taxpayer-identification-numbers
Timestamp: 2018-10-17 07:35:21
Document Index: 378785013

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A Proposed Rule by the Internal Revenue Service on 01/07/2013
913-918 (6 pages)
https://www.federalregister.gov/d/2012-31745 https://www.federalregister.gov/d/2012-31745
This PDF is the current document as it appeared on Public Inspection on 01/02/2013 at 04:15 pm.
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 § 601.601(d)(2).
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. § 301.6721-1(g)(1). Persons required to file information returns with the IRS are Start Printed Page 914filers. Treas. Reg. § 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. § 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. § 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 § 601.601(d)(2).
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. § 301.6109-1(a)(1)(i). SSNs, ITINs, and ATINs are used to identify individuals. Treas. Reg. § 301.6109-1(a)(1)(ii). An EIN is used to identify an individual or other person (whether or not an employer). Treas. Reg. § 301.7701-12.
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.Start Printed Page 915
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 § 601.601(d)(2).
(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 § 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 § 301.6109-4 of this chapter (Procedure and Administration Regulations).
(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 § 301.6109-4 of this chapter (Procedure and Administration Regulations).
(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 § 301.6109-4 of this chapter (Procedure and Administration Regulations).
(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 § 301.6109-4 of this chapter (Procedure and Administration Regulations).
(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 § 301.6109-4 of this chapter (Procedure and Administration Regulations).
(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 § 301.6109-4 of this chapter (Procedure and Administration Regulations).
(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 § 301.6109-4 of this chapter (Procedure and Administration Regulations). * * *
(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 Start Printed Page 917number for an individual person. For provisions relating to the use of TTINs, see § 301.6109-4 of this chapter (Procedure and Administration Regulations).
(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 § 301.6109-4 of this chapter (Procedure and Administration Regulations).
(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 § 301.6109-4 of this chapter (Procedure and Administration Regulations);
(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 § 301.6109-4 of this chapter (Procedure and Administration Regulations);
(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 § 301.6109-4 of this chapter (Procedure and Administration Regulations).
(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.Start Printed Page 918