HELP STAMP OUT IDENTITY THEFT
In another step by the IRS to reduce fraud and identity theft, you no longer need to put a full Taxpayer ID number on forms 1099 or W-2s. Here’s the wording from the IRS:
The IRS issued final regulations (Internal Revenue Bulletin 2014-31) on July 15, 2014 that allow you to truncate payee identification numbers on statements. The goal of these regulations is to reduce the risk of identity theft that may stem from including a taxpayer’s entire identifying number on a payee statement.
The regulations allow you to replace the first five digits of the nine digit number with asterisks (*) or X’s for the following:
• Payee’s social security number (SSN)
• Individual taxpayer identification number (ITIN)
• Employer identification number (EIN)
• Adoption taxpayer identification number (ATIN) on most payee statements
Truncated ID numbers are not a requirement by the IRS at this time, but it is good practice and shows your employees and vendors that you are serious about protecting their identity.
Examples of Truncated ID Numbers:
Joe DeVitis | 10/27/2016