[Federal Register Volume 82, Number 181 (Wednesday, September 20, 2017)]
[Proposed Rules]
[Pages 43920-43925]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-19910]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Parts 1, 31, and 301

[REG-105004-16]
RIN 1545-BN35


Use of Truncated Taxpayer Identification Numbers on Forms W-2, 
Wage and Tax Statement, Furnished to Employees

AGENCY: Internal Revenue Service (IRS), Treasury.

[[Page 43921]]


ACTION: Notice of proposed rulemaking.

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SUMMARY: This document contains proposed amendments to the regulations 
under sections 6051 and 6052 of the Internal Revenue Code (Code). To 
aid employers' efforts to protect employees from identity theft, these 
proposed regulations would amend existing regulations to permit 
employers to voluntarily truncate employees' social security numbers 
(SSNs) on copies of Forms W-2, Wage and Tax Statement, that are 
furnished to employees so that the truncated SSNs appear in the form of 
IRS truncated taxpayer identification numbers (TTINs). These proposed 
regulations also would amend the regulations under section 6109 to 
clarify the application of the truncation rules to Forms W-2 and to add 
an example illustrating the application of these rules. Additionally, 
these proposed amendments would delete obsolete provisions and update 
cross references in the regulations under sections 6051 and 6052. These 
proposed regulations affect employers who are required to furnish Forms 
W-2 and employees who receive Forms W-2.

DATES: Written or electronic comments and requests for a public hearing 
must be received by December 18, 2017.

ADDRESSES: Send submissions to: CC:PA:LPD:PR (REG-105004-16), Room 
5203, Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, 
Washington, DC 20044. Submissions may be hand-delivered between the 
hours of 8 a.m. and 4 p.m. to CC:PA:LPD:PR (REG-105004-16), Courier's 
Desk, Internal Revenue Service, 1111 Constitution Avenue NW., 
Washington, DC, or sent via the Federal eRulemaking Portal at 
www.regulations.gov (REG-105004-16).

FOR FURTHER INFORMATION CONTACT: Concerning these proposed regulations, 
Eliezer Mishory, (202) 317-6844; concerning submissions of comments 
and/or requests for a hearing, Regina Johnson, (202) 317-6901 (not 
toll-free numbers).

SUPPLEMENTARY INFORMATION: 

Background

    This document contains proposed amendments to the Income Tax 
Regulations (26 CFR part 1), the Employment Taxes and Collection of 
Income Tax at Source Regulations (26 CFR part 31), and the Procedure 
and Administration Regulations (26 CFR part 301) regarding statements 
that are required to be furnished to employees by employers or other 
persons under sections 6051 and 6052 of the Code. Section 6051(a) 
generally requires that an employer provide to each employee on or 
before January 31st of the succeeding year a written statement that 
shows the employee's total amount of wages and the total amount 
deducted and withheld as tax from those wages, along with other 
information, for each calendar year. Employers must use Form W-2 (or a 
substitute statement that complies with applicable revenue procedures 
relating to such statements) to provide the information required by 
section 6051(a) to employees. See Sec.  31.6051-1(a)(1)(i); Rev. Proc. 
2016-54, 2016-45 I.R.B. 685, also published as Publication 1141, 
``General Rules and Specifications for Substitute Forms W-2 and W-3,'' 
or any successor guidance. Section 6051(d) provides that, when required 
to do so by regulations, employers must file with the Secretary 
duplicates of the forms required to be furnished to employees under 
section 6051. Section 31.6051-2(a) generally requires employers to file 
Social Security Administration copies of Forms W-2 with the Social 
Security Administration. A person making a payment of third-party sick 
pay to an employee of another employer (payee) is required under 
section 6051(f)(1) to furnish a written statement to the employer for 
whom services are normally rendered containing certain information, 
including the payee's SSN. Under certain conditions, the employer for 
whom services are normally rendered is required under section 
6051(f)(2) to furnish a Form W-2 to the payee. This situation may 
arise, for example, when an insurance company is making payments to an 
employee of another employer because the employee is temporarily absent 
from work due to injury, sickness or disability, and the insurance 
company has satisfied the necessary requirements under Sec.  32.1(e) of 
the Temporary Employment Tax Regulations under the Act of December 29, 
1981 (Pub. L. 97-123) to transfer the obligation to do Form W-2 
reporting to the employer. Employers also must use Form W-2 to file and 
furnish information regarding payment of wages in the form of group-
term life insurance under section 6052.
    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. On July 15, 2014, the Treasury 
Department and the IRS published in the Federal Register (79 FR 41127-
02) final regulations (TD 9675) authorizing the use of TTINs on certain 
payee statements and certain other documents. These final regulations 
were in response to concerns about the risks of identity theft, 
including its effect on tax administration.
    Section 301.6109-4(b) generally provides that 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. Under 
Sec.  301.6109-4(a), a TTIN is an individual's 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. For example, a TTIN replacing an SSN 
appears in the form XXX-XX-1234 or ***-**-1234. Section 301.6109-
4(b)(2)(ii) prohibits using TTINs if, among other things, a statute, 
regulation, other guidance published in the Internal Revenue Bulletin, 
form, or instructions specifically requires the use of an SSN. 
Additionally, Sec.  301.6109-4(b)(2)(iii) prohibits the use of TTINs on 
any return, statement, or other document that is required to be filed 
with or furnished to the IRS.
    Prior to being amended by the Protecting Americans from Tax Hikes 
(PATH) Act of 2015, Public Law 114-113, div. Q, title IV, 129 Stat. 
2242, section 6051(a)(2) specifically required employers to include 
their employees' SSNs on copies of Forms W-2 that are furnished to 
employees. In addition, current regulations under Sec.  31.6051-1, as 
well as forms and instructions, require employers to include their 
employees' SSNs on copies of Forms W-2 that are furnished to employees. 
Section 409 of the PATH Act amended section 6051(a)(2) by striking 
``his social security account number'' from the list of information 
required on Form W-2 and inserting ``an identifying number for the 
employee'' instead. This statutory amendment is effective for 
statements issued after December 18, 2015, the date that the PATH Act 
was signed into law. Because an SSN is no longer required by section 
6051, the Treasury Department and the IRS propose amending the 
regulations to permit employers to truncate employees' SSNs to appear 
in the form of TTINs on copies of Forms W-2 that are furnished to 
employees. If the proposed regulations are finalized without change, 
the IRS intends to incorporate the revised regulations into forms and 
instructions, permitting employers to use a TTIN on the employee copy 
of the Form W-2. See Sec.  301.6109-4(b)(2)(i) and (ii).

[[Page 43922]]

Explanation of Provisions

Truncated SSN Permitted on Employee's Copies of Form W-2

    These proposed regulations amend Sec.  31.6051-1 to permit 
employers to truncate employees' SSNs to appear in the form of a TTIN 
on copies of Forms W-2 that are furnished to employees under section 
6051. Consistent with the rule in Sec.  301.6109-4(b)(2)(iii), 
prohibiting the use of TTINs on any return, statement, or other 
document that is required to be filed with or furnished to the IRS, 
these proposed regulations amend Sec.  31.6051-2 to clarify that 
employers may not truncate an employee's SSN to appear in the form of a 
TTIN on a copy of a Form W-2 that is filed with the Social Security 
Administration. This result is appropriate because both the IRS and the 
SSA need to utilize Forms W-2 to properly identify individuals to be 
able to carry out their respective duties.
    Consistent with the rule in Sec.  301.6109-4(b)(2)(ii) that 
prohibits using TTINs if, among other things, a statute specifically 
requires the use of an SSN, the proposed regulations also amend Sec.  
31.6051-3 to clarify that a payee's SSN may not be truncated to appear 
in the form of a TTIN on a statement furnished to the employer of the 
payee who received sick pay from a third party because section 
6051(f)(1)(A)(i) specifically requires such a statement to contain the 
employee's SSN. Nonetheless, these proposed regulations permit 
employers to truncate payees' SSNs to appear in the form of TTINs on 
copies of Forms W-2 that are furnished under section 6051(f)(2) to 
payees that report such third-party sick pay, in accordance with the 
general rule governing the reporting of wages to employees on Forms W-2 
under section 6051(a), because section 6051(f)(2) does not specifically 
require the use of an SSN.
    Further, these proposed regulations amend Sec.  1.6052-2 to permit 
employers to truncate employees' SSNs to appear in the form of TTINs on 
copies of Forms W-2 that are furnished to employees under section 
6052(b) regarding payment of wages in the form of group-term life 
insurance.
    These proposed regulations amend Sec.  301.6109-4 to clarify that 
truncation is not allowed on any return, statement, or other document 
that is required to be filed with or furnished to the Social Security 
Administration under the internal revenue laws. These proposed 
regulations also clarify the rule prohibiting truncation 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. The proposed regulations provide that truncation is allowed if 
a statute or IRS guidance (e.g., regulations, forms, instructions), 
that specifically requires use of a SSN, ITIN, ATIN, or EIN, also 
specifically states that the taxpayer identifying number may be 
truncated. These proposed regulations also add an example illustrating 
the application of these rules to Forms W-2. These proposed regulations 
also amend the existing example for clarity.

Miscellaneous Updates to Regulations Under Sections 6051 and 6052

    In addition to the amendments relating to the truncation of 
employees' SSNs to appear in the form of TTINs in specific 
circumstances, these proposed regulations eliminate obsolete provisions 
and update cross references in the regulations under sections 6051 and 
6052, as explained below.
    First, these proposed regulations amend Sec.  31.6051-1 to remove 
obsolete provisions regarding compensation, as defined in the Railroad 
Retirement Tax Act, paid during 1968, 1969, 1970, and 1971 and reported 
on the now obsolete Form W-2 (RR); the special rule for statements with 
respect to the refundable earned income credit for Form W-2 for 1987 
and 1988; and references to the annual contribution base (repealed in 
1993) for wages subject to the Hospital Insurance tax (commonly known 
as Medicare tax).
    Second, these proposed regulations amend Sec.  31.6051-1 to remove 
obsolete cross references, including a cross reference to former Sec.  
301.6676-1 relating to the penalty for failure to report an 
identification number or an account number, and a cross reference to 
section 6723 (prior to its amendment in 1989) that was relevant for 
Forms W-2 that were due from the beginning of 1987 through the end of 
1989.
    Third, these proposed regulations amend Sec.  31.6051-2 to update 
now inaccurate cross references resulting from statutory and regulatory 
changes regarding penalties for failures to file, and to remove a cross 
reference to section 6723 (prior to its amendment in 1989) that was 
relevant for Forms W-2 that were due from the beginning of 1987 through 
the end of 1989. These proposed regulations also change the title of 
Sec.  31.6051-2 from ``Information returns on Form W-3 and Internal 
Revenue Service copies of Forms W-2'' to ``Information returns on Form 
W-3 and Social Security Administration copies of Forms W-2,'' to 
conform with the text of the regulation that refers to the Social 
Security Administration copies of Form W-2. In addition, these proposed 
regulations remove obsolete references in Sec.  31.6051-2 to the 
requirements to submit information on magnetic tape and insert a 
reference to the requirements to submit information on magnetic media.
    Fourth, these proposed regulations amend Sec.  31.6051-3 to remove 
the obsolete transition rule for third-party sick pay that was paid to 
a payee after December 31, 1980, and before May 1, 1981.
    Fifth, these proposed regulations amend Sec.  1.6052-2 to remove an 
obsolete rule that allowed employers to use a statement other than a 
Form W-2 to satisfy the requirement to furnish a statement to an 
employee with respect to wages paid in the form of group-term life 
insurance. This rule was relevant for years prior to 1973, before Sec.  
1.6052-1 was amended to require employers to report wages in the form 
of group-term life insurance on Form W-2. At the same time, to conform 
to this new requirement, Sec.  1.6052-2 was amended to provide that the 
requirement to furnish a statement to an employee with respect to wages 
paid in the form of group-term life insurance may be satisfied by 
furnishing to the employee the employee's copy of Form W-2 that was 
filed pursuant to Sec.  1.6052-1. Because the transition period to 
require employers to file Form W-2 has long since passed and because 
the Treasury Department and the IRS understand that copies of Forms W-2 
are used to satisfy the requirement to furnish statements to employees 
under Sec.  1.6052-2, these proposed regulations require employers to 
furnish to employees the employees' copies of Forms W-2 that were filed 
pursuant to Sec.  1.6052-1, and these proposed regulations make 
conforming changes throughout that section.
    Finally, these proposed regulations update the now inaccurate cross 
reference resulting from statutory changes regarding penalties for 
failures to furnish statements under section 6052 and remove the deemed 
compliance rule, which applied only to years before 1972.

Proposed Effective/Applicability Date

    These proposed regulations will be effective on the date of the 
publication of the Treasury Decision adopting these rules as final in 
the Federal Register. These proposed regulations amend the effective/
applicability date provisions in Sec.  31.6051-1, Sec.  31.6051-3, and 
Sec.  301.6109-4, and add applicability date provisions to Sec.  
1.6052-2 and Sec.  31.6051-2. Several state tax administrators have 
requested additional time to develop systems to process the copies of 
Forms

[[Page 43923]]

W-2 filed with state income tax returns that may contain truncated 
SSNs. In light of this request, these proposed regulations will not 
apply to Forms W-2 required to be furnished before January 1, 2019. 
Accordingly, these proposed regulations provide that these regulations, 
as amended, will be applicable for statements required to be filed and 
furnished under sections 6051 and 6052 after December 31, 2018.

Statement of Availability of IRS Documents

    IRS Revenue Procedures, Revenue Rulings notices, and other guidance 
cited in this preamble are published in the Internal Revenue Bulletin 
(or Cumulative Bulletin) and are available from the Superintendent of 
Documents, U.S. Government Printing Office, Washington, DC 20402, or by 
visiting the IRS Web site at www.irs.gov.

Special Analyses

    Certain IRS regulations, including this one, are exempt from the 
requirements of Executive Order 12866, as supplemented and reaffirmed 
by Executive Order 13563. Therefore, a regulatory assessment is not 
required. Because these proposed 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, this notice of proposed rulemaking has been submitted to the 
Chief Counsel for Advocacy of the Small Business Administration for 
comment on its impact on small business.

Comments and Requests for Public Hearing

    Before these proposed regulations are adopted as final regulations, 
consideration will be given to any comments that are submitted timely 
to the IRS as prescribed in the preamble under the ADDRESSES section. 
The Treasury Department and the IRS request comments on all aspects of 
these proposed regulations. All comments submitted will be made 
available at www.regulations.gov or upon request. A public hearing may 
be scheduled if requested in writing by any person that timely submits 
written comments. If a public hearing is scheduled, notice of the date, 
time, and place for the hearing will be published in the Federal 
Register.

Drafting Information

    The principal author of these proposed regulations is Eliezer 
Mishory 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 31

    Employment taxes, Income taxes, Penalties, Pensions, Railroad 
Retirement, Reporting and recordkeeping requirements, Social Security, 
Unemployment compensation.

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, 31 and 301 are proposed to be amended 
as follows:

PART 1--INCOME TAXES

0
Paragraph 1. The authority citation for part 1continues to read in part 
as follows:

    Authority: 26 U.S.C. 7805, unless otherwise noted.
* * * * *
0
Par. 2. Section 1.6052-2 is amended by:
0
1. Revising paragraph (a).
0
2. Removing paragraph (b).
0
3. Redesignating paragraph (e) as new paragraph (b).
0
4. Revising paragraphs (c) and (d).
0
5. Removing paragraphs (f) and (g).
    The revisions read as follows:


Sec.  1.6052-2  Statements to be furnished employees with respect to 
wages paid in the form of group-term life insurance.

    (a) Requirement. Every employer filing a return under section 
6052(a) and Sec.  1.6052-1, with respect to group-term life insurance 
on the life of an employee, shall furnish to the employee whose name is 
set forth in such return the tax return copy and the employee's copy of 
Form W-2. Each copy of Form W-2 must show the information required to 
be shown on the Form W-2 filed under Sec.  1.6052-1. An employer may 
truncate an employee's social security number to appear in the form of 
an IRS truncated taxpayer identification number (TTIN) on copies of 
Form W-2 furnished to the employee. For provisions relating to the use 
of TTINs, see Sec.  301.6109-4 of this chapter (Procedure and 
Administration Regulations). The rules in Sec.  31.6051-1 of this 
chapter (Employment Taxes and Collection of Income Tax at Source 
Regulations) shall apply with respect to the means and time (including 
extensions thereof) for furnishing the employee's copy of Form W-2 
required by this section to the employee and making corrections to such 
form.
* * * * *
    (c) Penalty. For provisions relating to the penalty provided for 
failure to furnish a statement under this section, see section 6722 and 
the regulations thereunder.
    (d) Applicability date. This section is applicable for statements 
required to be furnished under section 6052 after December 31, 2018.

PART 31--EMPLOYMENT TAXES AND COLLECTION OF INCOME TAX AT SOURCE

0
Par. 3. The authority citation for part 31 is amended by adding an 
entry in numerical order to read in part as follows:

    Authority: 26 U.S.C. 7805 * * *
    Section 31.6051-3 also issued under 26 U.S.C. 6051.
* * * * *
0
Par. 4. Section 31.6051-1 is amended by:
0
1. Revising paragraphs (a)(1)(i)(b) and (b)(1)(ii).
0
2. Removing paragraph (d)(1)(ii)(C).
0
3. Revising paragraphs (f), (h)(2), and (i).
0
4. Removing paragraph (j)(8).
0
5. Adding paragraph (k).
    The revisions and addition read as follows:


Sec.  31.6051-1  Statements for employees.

    (a) * * *
    (1) * * *
    (i) * * *
    (b) The name, address, and social security number of the employee, 
which may be truncated to appear in the form of an IRS truncated 
taxpayer identification number (TTIN) on copies of Forms W-2 that are 
furnished to the employee (for provisions relating to the use of TTINs, 
see Sec.  301.6109-4 of this chapter (Procedure and Administration 
Regulations)), if wages as defined in section 3121(a) have been paid or 
if the Form W-2 is required to be furnished to the employee,
* * * * *
    (b) * * *
    (1) * * *
    (ii) The name, address, and social security number of the employee, 
which may be truncated to appear in the form of an IRS truncated 
taxpayer identification number (TTIN) on copies of Forms W-2 that are 
furnished to the employee (for provisions relating to the use of TTINs, 
see Sec.  301.6109-4 of this

[[Page 43924]]

chapter (Procedure and Administration Regulations)),
* * * * *
    (f) Statements with respect to compensation, as defined in the 
Railroad Retirement Tax Act--(1) Notification of possible credit or 
refund. With respect to compensation (as defined in section 3231(e)), 
every employer (as defined in section 3231(a)) who is required to 
deduct and withhold from an employee (as defined in section 3231(b)) a 
tax under section 3201, shall include on or with the statement required 
to be furnished to such employee under section 6051(a), a notice 
concerning the provisions of this title with respect to the allowance 
of a credit or refund of the tax on wages imposed by section 3101(b) 
and the tax on compensation imposed by section 3201 or 3211 which is 
treated as a tax on wages imposed by section 3101(b).
    (2) Information to be supplied to employees upon request. With 
respect to compensation (as defined in section 3231 (e)), every 
employer (as defined in section 3231(a)) who is required to deduct and 
withhold tax under section 3201 from an employee (as defined in section 
3231(b)) who has also received wages during such year subject to the 
tax imposed by section 3101(b), shall upon request of such employee 
furnish to him or her a written statement showing--
    (i) The total amount of compensation with respect to which the tax 
imposed by section 3101(b) was deducted;
    (ii) The total amount of employee tax under section 3201 deducted 
and withheld (increased by any adjustment in the calendar year for 
overcollection, or decreased by any adjustment in such year for 
undercollection, of such tax during any prior year); and
    (iii) The proportion thereof (expressed either as a dollar amount, 
or a percentage of the total amount of compensation as defined in 
section 3231(e), or as a percentage of the total amount of employee tax 
under section 3201) withheld as tax under section 3201 for financing 
the cost of hospital insurance benefits.
    (h) * * *
    (2) Time for furnishing statement. The statement required by this 
paragraph (h) for a calendar year shall be furnished--
    (i) In the case of an employee who is required to be furnished a 
Form W-2, Wage and Tax Statement, for the calendar year, within one 
week of (before or after) the date that the employee is furnished a 
timely Form W-2 for the calendar year (or, if a Form W-2 is not so 
furnished, on or before the date by which it is required to be 
furnished); and
    (ii) In the case of an employee who is not required to be furnished 
a Form W-2 for the calendar year, on or before February 7 of the year 
succeeding the calendar year.
* * * * *
    (i) Cross references. For provisions relating to the penalties 
provided for the willful furnishing of a false or fraudulent statement, 
or for the willful failure to furnish a statement, see Sec.  31.6674-1 
and section 7204. For additional provisions relating to the inclusion 
of identification numbers and account numbers in statements on Form W-
2, see Sec. Sec.  31.6109-1 and 31.6109-4. For the penalties applicable 
to information returns and payee statements, see sections 6721-6724 and 
the regulations thereunder.
* * * * *
    (k) Applicability date. This section is applicable for statements 
required to be furnished under section 6051 after December 31, 2018.
0
Par. 5. Section 31.6051-2 is amended by revising paragraphs (a) and (c) 
and adding paragraph (d) to read as follows:


Sec.  31.6051-2  Information returns on Form W-3 and Social Security 
Administration copies of Forms W-2.

    (a) In general. Every employer who is required to make a return of 
tax under Sec.  31.6011(a)-1 (relating to returns under the Federal 
Insurance Contributions Act), Sec.  31.6011(a)-4 (relating to returns 
of income tax withheld from wages), or Sec.  31.6011(a)-5 (relating to 
monthly returns) for a calendar year or any period therein, shall file 
the Social Security Administration copy of each Form W-2 required under 
Sec.  31.6051-1 to be furnished by the employer with respect to wages 
paid during the calendar year. An employer may not truncate an 
employee's social security number to appear in the form of an IRS 
truncated taxpayer identification number (TTIN) on copies of Form W-2 
filed with the Social Security Administration. Each Form W-2 and the 
transmittal Form W-3 shall together constitute an information return to 
be filed with the Social Security Administration as indicated on the 
instructions to such forms. For the requirement to submit the 
information on Form W-2 on magnetic media, see section 6011(e) and 
Sec.  301.6011-2 of this chapter (Procedure and Administration 
Regulations).
* * * * *
    (c) Cross references. For provisions relating to the time for 
filing the information returns required by this section and to 
extensions of the time for filing, see sections 6071 and 6081 and the 
regulations thereunder. For the penalties applicable to information 
returns and payee statements, see sections 6721 through 6724 and the 
regulations thereunder.
    (d) Applicability date. This section is applicable for statements 
required to be filed under section 6051 after December 31, 2018.
0
Par. 6. Section 31.6051-3 is amended by revising paragraphs (a)(1)(i), 
(b)(1), (e)(3), and (f) and removing paragraph (g) to read as follows:


Sec.  31.6051-3  Statements required in case of sick pay paid by third 
parties.

    (a) * * *
    (1) * * *
    (i) The name and, if there is withholding from sick pay under 
section 3402(o) and the regulations thereunder, the social security 
account number of the payee (the payee's social security number may not 
be truncated to appear in the form of an IRS truncated taxpayer 
identification number (TTIN)),
    (b) * * *
    (1) All of the information required to be furnished under paragraph 
(a) of this section, but the employer may truncate the payee's social 
security number to appear in the form of an IRS truncated taxpayer 
identification number (TTIN) on copies of Forms W-2 that are furnished 
to the payee (for provisions relating to the use of TTINs, see Sec.  
301.6109-4 of this chapter (Procedure and Administration Regulations)),
* * * * *
    (e) * * *
    (3) The provisions of section 6109 (relating to identifying 
numbers) and the regulations thereunder shall be applicable to Form W-2 
and to any payee of sick pay to whom a statement on Form W-2 is 
required by this section to be furnished. The employer must include the 
social security number of the payee on all copies of Forms W-2. The 
employer may truncate the payee's social security number to appear in 
the form of an IRS truncated taxpayer identification number (TTIN) on 
copies of Forms W-2 that are furnished to the payee. For provisions 
relating to the use of truncated taxpayer identification numbers 
(TTINs), see Sec.  301.6109-4 of this chapter (Procedure and 
Administration Regulations).
    (f) Applicability date. This section is applicable for statements 
required to be furnished under section 6051 after December 31, 2018.

PART 301--PROCEDURE AND ADMINISTRATION

0
Par. 7. The authority citation for part 301 continues to read in part 
as follows:


[[Page 43925]]


    Authority: 26 U.S.C. 7805 * * *

0
Par. 8. Section 301.6109-4 is amended by revising paragraphs (b)(2)(ii) 
and (iii), (b)(3), and (c) to read as follows:


Sec.  301.6109-4  IRS truncated taxpayer identification numbers.

* * * * *
    (b) * * *
    (2) * * *
    (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 and does not specifically state that the taxpayer 
identifying number may be truncated. 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 or the Social Security Administration in the case of 
forms required to be filed with the Social Security Administration 
under the internal revenue laws.
* * * * *
    (3) Examples. The provisions of this paragraph (b) are illustrated 
by the following examples:

    (i) Example 1. Pursuant to section 6051(d) and Sec.  31.6051-
2(a) of this chapter, Employer files the Social Security 
Administration copy of Employee's Form W-2, Wage and Tax Statement, 
with the Social Security Administration. Employer may not truncate 
any identifying number on the Social Security Administration copy. 
Pursuant to section 6051(a) and Sec.  31.6051-1(a)(1)(i) of this 
chapter, Employer furnishes copies of Form W-2 to Employee. There 
are no applicable statutes, regulations, other published guidance, 
forms, or instructions that prohibit use of a TTIN on Form W-2, and 
Sec.  31.6051-1(a)(1)(i) specifically permits truncating employees' 
SSNs. Accordingly, Employer may truncate Employee's SSN to appear in 
the form of a TTIN on copies of Form W-2 furnished to Employee. 
Employer may not truncate its own EIN on copies of Form W-2 
furnished to Employee.
    (ii) Example 2. 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. Charitable Organization may truncate 
Donor's SSN to appear in the form of a TTIN 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. Charitable Organization may not truncate its own EIN 
on copies B and C of the Form 1098-C because a person cannot 
truncate its own taxpayer identifying number on any statement or 
other document the person furnishes to another person. Charitable 
Organization may not truncate any identifying number on copy A of 
the Form 1098-C because copy A is required to be filed with the IRS.

    (c) Applicability date. This section is applicable to returns, 
statements and other documents required to be filed or furnished after 
December 31, 2018.

Kirsten Wielobob,
Deputy Commissioner for Services and Enforcement.
[FR Doc. 2017-19910 Filed 9-18-17; 11:15 am]
BILLING CODE 4830-01-P