Pension
Digest Alert
Social Security Number Truncation
December 21, 2009
On December 21, 2009, the IRS issued Notice 2009-93,
as published in Internal Revenue Bulletin 2009-51, concerning the truncation of Social
Security Numbers and certain other identifying numbers for reporting years 2009 and 2010.
Because of the growing concerns over the security
of personal data, including Social Security Numbers, the IRS has initiated a “Pilot
Program” allowing the truncation or masking of certain identifying numbers on certain
reports for 2009 and 2010.
A “Pilot Program” means it is not permanent
and it is not a mandatory procedure. It is, however, effective immediately.
“Truncation” means the identifying numbers
are hidden or concealed in a certain way so as not to reveal the entire number.
“Identifying Number” in this Notice only
refers to a Social Security Number, IRS Individual Taxpayer Identification Number, or IRS
Adoption Taxpayer Identification Number.
This Pilot Program only applies to IRS Forms 1098,
1099, and 5498. This includes all IRA, HSA, and CESA forms. It only applies to the paper
copies for the payee, for instance, paper copies to the IRA accountholder or to the QRP
participant. It does not apply to any filings with the IRS. It also applies to any valid
substitute or composite substitute form’s paper copy sent to the payee. Electronic
copies sent to the payee are not included.
This IRS Notice will consider the applicable filer
to be in compliance with all requirements in Treasury and IRS guidance, whether in a regulation,
form or form instructions, to include a payee’s identifying number on a payee statement.
The applicable filer must also comply with all other reporting rules, regulations, and
procedures.
Compliance of this Pilot Program must include the
following:
- The only Identifying Numbers that can be truncated
are the Social Security Number, IRS Individual Taxpayer Identification Number, or IRS
Adoption Taxpayer Identification Number,
- The Identifying Number is only truncated with asterisks or Xs
in a certain manner. The first five numbers of the Identifying Number are replaced with
asterisks (*) or Xs.
EXAMPLE SSN 123-45-6789 is truncated to ***-**-6789 or XXX-XX-6789,
- Truncation of the Identifying Number can only be used on the payee
paper forms of Forms 1098, 1099, and 5498 and only for calendar years 2009 and 2010.
Because it is a pilot program, the IRS is asking for
comments by May 1, 2010. In particular, the IRS would like comments on the following:
- Should truncation of an individual’s identifying
number be required, rather than just permitted?
- Should truncation of an individual’s identifying
number be permitted or required on paper copies of statements beyond the scope of this
Pilot Program?
- Should truncation of an individual’s identifying
number be permitted or required on payee statements furnished electronically?
- Does truncation create difficulties for filers
and/or payees?
- Any other comments relating to this procedure are also encouraged
by the IRS
Comments should be submitted (mailed) to:
Internal Revenue Service
CC:PA:LPD:PR(Notice 2009-93), Room 5203
P.O. Box 7604, Ben Franklin Station, N.W.
Wahington, D.C. 20044
Comments can be hand delivered, Monday through
Friday, between 8:00 a.m. and 4:00 p.m. (Eastern Time Zone) to:
CC:PA:LPD:PR(Notice 2009-93), Courier’s Desk
Internal Revenue Service
1111 Constitution Avenue, N.W.
Washington D.C.
Comments can also be submitted electronically
via the following e-mail address:
Notice.Comments@irscounsel.treas.gov
(Include “Notice 2009-93” in the the subject.
The IRS advises that all comments will be available
for public inspection.
The link to the complete IRS Notice is http://www.irs.gov/pub/irs-drop/n-09-93.pdf.