In response to the growing problem of identity theft-related fraud, the Internal Revenue Service (IRS) has issued proposed regulations to create a new taxpayer identification number. The proposed Truncated Taxpayer Identification Number (TTIN) could be used in certain forms instead of a Social Security number, Individual Taxpayer Identification Number, or IRS Adoption Taxpayer Identification Number.
Filers of certain information returns would be able to use a TTIN to identify the individual being furnished a statement. The TTIN would display only the last four digits of the individual’s identifying number in the format XXX-XX-1234 or ***-**-1234. The TTIN could be used in payee statements on 1099, 1098, and 5498 series forms, except for Form 1098-C.
The IRS has been struggling to curb identity theft. From 2008 through the middle of 2012, it identified more than 600,000 taxpayers who have been affected by identity theft. It has added filters to its system to check for signs of identity theft and stop the processing of suspicious tax returns. The IRS has also enhanced the use of Identity Protection Personal Identification Numbers for identity theft victims.
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