On July 15, 2014, the Internal Revenue Service published final regulations that allow filers of information returns to use a truncated taxpayer identification number (TTIN) on certain payee statements and other documents used for information reporting purposes. The final regulations adopt the previously proposed regulations published on January 7, 2013 with some modifications that expand the application of TTINs as part of the Service’s ongoing efforts to deter identity theft.
The use of the TTINs on information returns and other documents required to be furnished to another person remains voluntary. It is expected that the expanded scope of the final regulations will increase participation in the TTIN program since it allows filers to provide additional protection to sensitive customer information. Filers of information returns which includes both financial services and non-financial services entities should now consider whether they will be able to use TTINs on the information returns they file and determine if any modifications should be made to their systems to allow for TIN masking as permitted by the final regulations.