[Federal Register Volume 79, Number 135 (Tuesday, July 15, 2014)]
[Rules and Regulations]
[Pages 41127-41132]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-16464]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Parts 1 and 301
[TD 9675]
RIN 1545-BJ16
IRS Truncated Taxpayer Identification Numbers
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Final regulations.
-----------------------------------------------------------------------
SUMMARY: This document contains final regulations regarding an IRS
truncated taxpayer identification number, or a TTIN. Where not
prohibited by the Internal Revenue Code, applicable regulations, other
guidance published in the Internal Revenue Bulletin, forms, or
instructions, these regulations allow use of a TTIN in lieu of a
taxpayer's social security number (SSN), IRS individual taxpayer
identification number (ITIN), IRS adoption taxpayer identification
number (ATIN), or employer identification number (EIN) on payee
statements and certain other documents. The TTIN displays only the last
four digits of a taxpayer identifying number; either asterisks (*) or
Xs replace the first five digits of the identifying number. These
regulations affect persons that furnish or receive payee statements and
other documents that the Internal Revenue Code, regulations, or other
published guidance requires to be furnished to another person to the
extent that a TTIN may appear in lieu of the SSN, ITIN, ATIN, or EIN of
the payee or document recipient.
DATES: Effective Date: These regulations are effective on July 15,
2014.
Applicability Date: For dates of applicability see Sec. Sec.
1.6042-4(g), 1.6043-4(i), 1.6044-5(d), 1.6045-2(i), 1.6045-3(g),
1.6045-4(s), 1.6045-5(h), 1.6049-6(e)(5), 1.6050A-1(e), 1.6050E-1(m),
1.6050N-1(e), 1.6050P-1(h), 1.6050S-1(f), 1.6050S-3(g), and 301.6109-
4(c).
FOR FURTHER INFORMATION CONTACT: Jacqueline K. Queener, (202) 317-6844
(not a toll-free number).
SUPPLEMENTARY INFORMATION:
Background
This document amends the Income Tax Regulations (26 CFR part 1) and
the Procedure and Administration Regulations (26 CFR part 301) to
authorize filers of information returns to truncate a payee's or other
person's nine-digit identifying number on payee statements and certain
other documents. The goal of these amendments is to reduce the risk of
identity theft that may stem from the inclusion of a taxpayer's entire
identifying number on a payee statement or other document.
Concerned about the risks of identity theft, including its effect
on tax administration, the IRS established a pilot program allowing
filers of information returns who met certain requirements to truncate
an individual payee's identifying number on paper payee statements
(Forms 1098, 1099, and 5498) for calendar years 2009 and 2010. See
Notice 2009-93, 2009-51 IRB 863. The IRS subsequently extended the
pilot program for payee statements for calendar years 2011 and 2012,
and modified the program by removing the
[[Page 41128]]
Form 1098-C from the list of eligible documents on which a TTIN can be
used because it is an acknowledgement under section 170(f)(12) rather
than a payee statement. See Notice 2011-38, 2011-20 IRB 784.
On January 7, 2013, the Treasury Department and the IRS published a
notice of proposed rulemaking (REG-148873-09) in the Federal Register,
78 FR 913, establishing an IRS truncated taxpayer identification
number, a TTIN, and setting forth guidelines for its use. The scope of
the proposed regulations mirrored that of the pilot project as
reflected in Notice 2011-38 with one exception made in conformance with
comments received in response to the pilot program: The proposed
regulations permitted use of a TTIN on electronic payee statements in
addition to paper payee statements. A public hearing was scheduled for
March 12, 2013. One request to testify at the public hearing was
received but later withdrawn, and the public hearing was cancelled.
Eleven written comments responding to the NPRM were received and are
available for public inspection at http://www.regulations.gov or upon
request. After consideration of all the comments, the proposed
regulations are adopted as amended by this Treasury decision. The
amendments are discussed in the next section.
Summary of Comments and Explanation of Revisions
While comments received in response to the NPRM overwhelmingly
supported the proposed regulations, one commenter recommended against
finalizing the proposed regulations because he failed to see the
benefit of a TTIN and believed issuance of a TTIN would use funds for a
structure that already exists. As defined in Sec. 301.6109-4(a) of the
proposed regulations, a TTIN is simply a method for partially masking
taxpayer identifying numbers that already exist. Use of a TTIN does not
require issuance of a new number and no funds will be expended for that
purpose. The Treasury Department and the IRS believe that the
truncation of TINs will reduce the risk of identity theft. Therefore,
the final regulations do not adopt this recommendation.
Almost all commenters recommended allowing use of a TTIN in place
of an EIN. Some commenters stated that, due to technical constraints or
incomplete data records, many filers could not segregate payees with
EINs from payees with individual taxpayer identifying numbers (SSNs,
ITINs, and ATINs) that could be truncated under the proposed
regulations. Therefore, these filers were not able to use TTINs at all.
Other commenters stated that small businesses and closely-held entities
have the same privacy concerns that individuals have, and should be
granted the same benefits in protecting their identifying information.
In light of these comments, the Treasury Department and the IRS believe
that allowing truncated EINs will encourage filers to use TTINs for all
payees and will further reduce risk of identity theft. Accordingly,
Sec. 301.6109-4 of the final regulations permits truncation of EINs.
Most commenters recommended expanding the authorization to use a
TTIN on more documents than just payee statements in the Forms 1098,
1099, and 5498 series. Commenters specifically recommended that the IRS
consider allowing a TTIN to be used on a grantor trust letter as
required by Sec. 1.671-4(b); a widely held fixed investment trust
(WHFIT) statement as required by Sec. 1.671-5(e); a copy of a Schedule
K-1 issued to a partner, shareholder, or beneficiary under section
6012(a)(4), 6031(a)-(b), 6034A, or 6037(b); any Form 1097 series
return; a Form 2439 ``Notice to Shareholder of Undistributed Long-Term
Capital Gains''; or any other payee statement.
Under the proposed regulations, use of a TTIN was permitted only if
affirmatively authorized by the IRS. Commenters expressed concern that
allowing TTINs to be used only when authorized unduly limits the
documents on which TTINs may be used, which in turn reduces the effect
of using TTINs to help combat identity theft. Continued use of this
approach would impose an administrative burden on IRS to keep updated
the list of documents on which TTINs are permitted. The commenters
suggested that allowing TTINs to be used unless prohibited would
address these concerns. The Treasury Department and the IRS agree that
TTINs should be permitted on most documents that the internal revenue
laws require to be provided to payees and other persons. Accordingly,
the final regulations 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,
other guidance published in the Internal Revenue Bulletin, forms, or
instructions.
Under this modified approach, there is no need to amend every
information reporting regulation to permit the use of a TTIN. However,
it may be unclear whether language in certain regulations could be
interpreted as requiring use of an unmasked SSN, ITIN, ATIN, or EIN,
thereby prohibiting use of a TTIN. Accordingly, to avoid confusion, the
final regulations retain the provisions in the proposed regulations
that amend specific information reporting regulations that contained
language that could be interpreted as specifically requiring use of an
unmasked SSN, ITIN, ATIN, or EIN.
One commenter recommended allowing use of TTINs on Form 3520,
Annual Return To Report Transactions With Foreign Trusts and Receipts
of Certain Foreign Gifts, and Form 3520A, Annual Information Return of
Foreign Trust With a U.S. Owner (Under Section 6048(b)). Taxpayer
identifying numbers on returns and statements filed with the IRS are
necessary for the IRS to determine compliance with the tax laws and to
validate the information provided. Therefore, the final regulations
retain the rule in the proposed regulations that TTINs may not be used
on a return filed with the IRS. Accordingly, because Forms 3520 and
3520A are returns required to be filed with the IRS this recommendation
is not adopted.
Consistent with the approach adopted in the final regulations, the
regulations were revised to list the circumstances where use of a TTIN
is not permitted. Under Sec. 301.6109-4(b)(2), a TTIN may not be used
(1) where prohibited by statute, regulation, other guidance published
in the Internal Revenue Bulletin, form, or instructions; (2) where a
statute, regulation, other guidance published in the Internal Revenue
Bulletin, form, or instructions, specifically requires use of an SSN,
ITIN, ATIN, or EIN; or (3) on any return or statement required to be
filed with, or furnished to, the IRS. Further, a person may not
truncate its own taxpayer identification number on any tax form,
statement, or other document that person furnishes to another person.
For example, an employer cannot use a TTIN in place of its EIN on a
Form W-2, Wage and Tax Statement, that the employer furnishes to an
employee; and a person may not use a TTIN in place of its TIN on a Form
W-9, Request for Taxpayer Identification Number and Certification.
An example was added to Sec. 301.6109-4 of the regulations to
illustrate the operation of the revised rule. In addition, because use
of a TTIN is not limited by type of form, the definitions set forth in
Sec. 301.6109-4(b) of the proposed regulations are no longer necessary
and have been deleted from the final regulations.
Because a TTIN is a permissible method of displaying the taxpayer
identifying number, use of a TTIN when permitted by Sec. 301.6109-4 of
the final
[[Page 41129]]
regulations satisfies the requirement to include a taxpayer identifying
number on a document or statement. To eliminate any potential
confusion, Sec. 301.6109-4(b) of the final regulations is amended to
state that use of a TTIN as permitted in these regulations will not
result in application of any penalty (e.g., a penalty under section
6722 for failure to timely furnish a correct statement) for failure to
include a taxpayer identifying number on any payee statement or other
document.
Section 301.6109-4 of the final regulations is effective July 15,
2014. The amendments to the specific information reporting regulations
are generally effective for payee statements due after December 31,
2014. As stated in the proposed TTIN regulations, taxpayers were
allowed to rely on the rules in the proposed regulations prior to
publication of these final regulations. Finally, modifications have
been made to the effective date sections of some of these information
reporting regulations to remove outdated references.
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) of
the Code, the notice of proposed rulemaking that preceded these final
regulations was submitted to the Chief Counsel for Advocacy of the
Small Business Administration for comment on its impact on small
business, and no comments were received.
Drafting Information
The principal author of the final regulations is Jacqueline
Queener, 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.
Adoption of Amendments to the Regulations
Accordingly, 26 CFR parts 1 and 301 are 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 paragraphs (b) and (g)
to read as follows:
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. 2012-38, 2012-48 IRB
575, also published as Publication 1179, ``General Rules and
Specifications for Substitute Forms 1096, 1098, 1099, 5498, and Certain
Other Information Returns,'' or any successor guidance. An IRS
truncated taxpayer identifying number (TTIN) may be used as the
identifying number of the recipient. For provisions relating to the use
of TTINs, see Sec. 301.6109-4 of this chapter (Procedure and
Administration Regulations).
* * * * *
(g) Effective/applicability date. This section is effective for
payee statements due after December 31, 1995, without regard to
extensions. The amendments to paragraph (b) are effective for payee
statements due after December 31, 2014. For payee statements due before
January 1, 2015, Sec. 1.6042-4(b) (as contained in 26 CFR part 1,
revised April 2013) shall apply.
0
Par. 3. Section 1.6043-4 is amended by:
0
1. Adding two new sentences to the end of paragraph (b)(4).
0
2. Revising the heading and adding two new sentences to the end of
paragraph (i).
The revision and additions 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 of the 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).
* * * * *
(i) Effective/applicability date.* * * The amendments to paragraph
(b)(4) are effective for any Form 1099-CAP required to be furnished
after December 31, 2014. For any Form 1099-CAP required to be furnished
before January 1, 2015, Sec. 1.6043-4(b) (as contained in 26 CFR part
1, revised April 2013) shall apply.
0
Par. 4. Section 1.6044-5 is amended by:
0
1. Adding two new sentences to the end of paragraph (b).
0
2. Revising paragraph (d).
The addition and revision 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 of the 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).
* * * * *
(d) Effective/applicability date. This section is effective for
payee statements due after December 31, 1995, without regard to
extensions. The amendments to paragraph (b) are effective for payee
statements due after December 31, 2014. For payee statements due before
January 1, 2015, Sec. 1.6044-5(b) (as contained in 26 CFR part 1,
revised April 2013) shall apply.
0
Par. 5. Section 1.6045-2 is amended by:
0
1. Adding two new sentences to the end of paragraph (c).
0
2. Revising the heading and adding two new sentences after the first
sentence of paragraph (i).
The revision and additions 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
[[Page 41130]]
as the identifying number of the 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).
* * * * *
(i) Effective/applicability date. * * * The amendments to paragraph
(c) apply to payee statements due after December 31, 2014. For payee
statements due before January 1, 2015, Sec. 1.6045-2(c) (as contained
in 26 CFR part 1, revised April 2013) shall apply. * * *
0
Par. 6. Section 1.6045-3 is amended by:
0
1. Adding two new sentences to the end of paragraph (e)(1).
0
2. Revising the heading and adding two new sentences to the end of
paragraph (g).
The revision and additions 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 of the customer. For provisions
relating to the use of TTINs, see Sec. 301.6109-4 of this chapter
(Procedure and Administration Regulations).
* * * * *
(g) Effective/applicability date. * * * The amendments to paragraph
(e)(1) apply to payee statements due after December 31, 2014. For payee
statements due before January 1, 2015, Sec. 1.6045-3(e)(1) (as
contained in 26 CFR part 1, revised April 2013) shall apply.
0
Par. 7. Section 1.6045-4 is amended by:
0
1. Revising paragraph (m)(1).
0
2. Adding two new sentences to the end of paragraph (s).
The revision and addition 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 of the 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.
* * * * *
(s) * * * The amendments to paragraph (m)(1) apply to payee
statements due after December 31, 2014. For payee statements due before
January 1, 2015, Sec. 1.6045-4(m)(1) (as contained in 26 CFR part 1,
revised April 2013) shall apply.
0
Par. 8. Section 1.6045-5 is amended by:
0
1. Adding two new sentences before the last sentence of paragraph
(a)(3)(i).
0
2. Revising the heading and adding two new sentences to the end of
paragraph (h).
The revision and additions 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 of the 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). * * *
* * * * *
(h) Effective/applicability date. * * * The amendments to paragraph
(a)(3)(i) apply to payee statements due after December 31, 2014. For
payee statements due before January 1, 2015, Sec. 1.6045-5(a)(3)(i)
(as contained in 26 CFR part 1, revised April 2013) shall apply.
0
Par. 9. Section 1.6049-6 is amended by:
0
1. Adding paragraph (b)(3).
0
2. Adding a new sentence at the beginning of paragraph (e)(5).
The additions 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 number for the person. For provisions relating to
the use of TTINs, see Sec. 301.6109-4 of this chapter (Procedure and
Administration Regulations).
* * * * *
(e) * * *
(5) Effective/applicability date. Paragraph (b)(3) applies to payee
statements due after December 31, 2014. * * *
0
Par. 10. Section 1.6050A-1 is amended by:
0
1. Adding two new sentences to the end of paragraph (c)(1).
0
2. Adding paragraph (e).
The additions 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).
* * * * *
[[Page 41131]]
(e) Effective/applicability date. The rules in this section apply
to information returns and payee statements due after December 31,
2014. For rules applicable for information returns and payee statements
due before January 1, 2015, Sec. 1.6050A-1(c)(1) (as contained in 26
CFR part 1, revised April 2013) shall apply.
0
Par. 11. Section 1.6050E-1 is amended by:
0
1. Adding two new sentences to the end of paragraph (k)(1).
0
2. Revising the heading and adding two new sentences to the end of
paragraph (m).
The revision and additions 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 of 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).
* * * * *
(m) Effective/applicability date.* * * The amendments to paragraph
(k)(1) apply to payee statements due after December 31, 2014. For payee
statements due before January 1, 2015, Sec. 1.6050E-5(k)(1) (as
contained in 26 CFR part 1, revised April 2013) shall apply.
0
Par. 12. Section 1.6050N-1 is amended by:
0
1. Adding two new sentences to the end of paragraph (b).
0
2. Revising paragraph (e).
The addition and revision 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 of the recipient. For provisions
relating to the use of TTINs, see Sec. 301.6109-4 of this chapter
(Procedure and Administration Regulations).
* * * * *
(e) Effective/applicability date. This section applies to payee
statements due after December 31, 2014, without regard to extensions.
For payee statements due before January 1, 2015, Sec. 1.6050N-1 (as
contained in 26 CFR part 1, revised April 2013) shall apply.
0
Par. 13. Section 1.6050P-1 is amended by:
0
1. Removing ``section;'' from paragraph (f)(1)(i) and adding
``section.'' in its place.
0
2. Adding two new sentences to the end of paragraph (f)(1)(i).
0
3. Revising paragraph (h).
The addition and revisions 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 the person 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);
* * * * *
(h) Effective/applicability date. This section applies to
discharges of indebtedness after December 31, 2013. For discharges of
indebtedness before January 1, 2014, Sec. 1.6050P-1 (as contained in
26 CFR part 1, revised April 2013) shall apply.
0
Par. 14. Section 1.6050S-1 is amended by:
0
1. Removing ``section;'' from paragraph (c)(1)(i) and adding
``section.'' in its place.
0
2. Adding two new sentences to the end of paragraph (c)(1)(i).
0
3. Revising the heading and adding two new sentences to the end of
paragraph (f).
The revision and additions 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 of 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);
* * * * *
(f) Effective/applicability date.* * * Paragraph (c)(1)(i) applies
to payee statements due after December 31, 2014. For payee statements
due before January 1, 2015, Sec. 1.6050S-1 (as contained in 26 CFR
part 1, revised April 2013) shall apply.
0
Par. 15. Section 1.6050S-3 is amended by:
0
1. Removing ``section;'' from paragraph (d)(1)(i) and adding
``section.'' in its place.
0
2. Adding two new sentences to the end of paragraph (d)(1)(i).
0
3. Revising paragraph (g).
The addition and revisions 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 of the 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).
* * * * *
(g) Effective/applicability date. The rules of this section apply
to information returns required to be filed, and payee statements
required to be furnished after December 31, 2014. For information
returns required to be filed, and payee statements required to be
furnished before January 1, 2015, Sec. 1.6050S-3 (as contained in 26
CFR part 1, revised April 2013) shall apply.
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-- Definition. An IRS truncated taxpayer
identification number (TTIN) is an individual's social security number
(SSN), IRS individual taxpayer identification number (ITIN), IRS
adoption taxpayer identification number (ATIN), or IRS employer
identification number (EIN) in which the first five digits of the nine-
digit number are replaced with Xs or asterisks. The TTIN takes the same
format of the identifying number it replaces, for example XXX-XX-1234
when replacing an SSN, or XX-XXX1234 when replacing an EIN.
[[Page 41132]]
(b) Use of a TTIN. (1) In general. Except as provided in paragraph
(b)(2) of this section, a TTIN may be used to identify any person on
any statement or other document that the internal revenue laws require
to be furnished to another person. Use of a TTIN is permissive and not
mandatory. Use of a TTIN as permitted by this section will not result
in application of any penalty for failure to include a correct taxpayer
identifying number on any payee statement or other document. For
example, the section 6722 penalty for failure to timely furnish a
correct statement would not apply solely because the payor used a TTIN
as permitted by this section.
(2) TTIN not permitted. Use of a TTIN is not permitted in the
following circumstances:
(i) A TTIN may not be used on a statement or other document if such
use is prohibited by statute, regulation, other guidance published in
the Internal Revenue Bulletin, form, or instructions.
(ii) A TTIN may not be used on a statement or document if a
statute, regulation, other guidance published in the Internal Revenue
Bulletin, form, or instructions, specifically requires use of a SSN,
ITIN, ATIN, or EIN. For example, a TTIN may not be used on a Form W-
8ECI or Form W-8IMY because the forms and/or form instructions
specifically prescribe use of an SSN, EIN, or ITIN for the U.S.
taxpayer identification number.
(iii) A TTIN may not be used on any return, statement, or other
document that is required to be filed with or furnished to the Internal
Revenue Service.
(iv) A person may not truncate its own taxpayer identifying number
on any statement or other document that it furnishes to another person.
For example, an employer may not truncate its EIN on a Form W-2, Wage
and Tax Statement, that the employer furnishes to an employee; and a
person may not truncate its TIN on a Form W-9, Request for Taxpayer
Identification Number and Certification.
(3) Example. The provisions of paragraph (a) are illustrated by the
following example:
Example. On April 5, year 1, Donor contributes a used car with
a blue book value of $1100 to Charitable Organization. On April 20,
year 1, Charitable Organization sends Donor copies B and C of the
Form 1098-C as a contemporaneous written acknowledgement of the
$1100 contribution as required by section 170(f)(12). In late-
February, year 2, Charitable Organization prepares and files copy A
of Form 1098-C with the IRS, reporting Donor's donation of a
qualified vehicle in year 1. The Charitable Organization may use a
TTIN in lieu of Donor's complete SSN in the Donor's Identification
Number box on copies B and C of the Form 1098-C because copies B and
C of the Form 1098-C are documents required by the Internal Revenue
Code and regulations to be furnished to another person, there are no
applicable statutes, regulations, other published guidance, forms or
instructions, that prohibit the use of a TTIN on those copies, and,
there are no applicable statutes, regulations, other published
guidance, forms, or instructions that specifically require use of an
SSN or other identifying number on those copies. A TTIN cannot be
used on copy A of the Form 1098-C, however, because copy A is
required to be filed with the IRS.
(c) Effective/applicability date. This section applies on and after
July 15, 2014.
John Dalrymple,
Deputy Commissioner for Services and Enforcement.
Approved: May 30, 2014.
Mark J. Mazur,
Assistant Secretary of the Treasury (Tax Policy).
[FR Doc. 2014-16464 Filed 7-14-14; 8:45 am]
BILLING CODE 4830-01-P