IRS Truncated Taxpayer Identification Numbers, 913-918 [2012-31745]
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Federal Register / Vol. 78, No. 4 / Monday, January 7, 2013 / Proposed Rules
(directly or indirectly) majority-owned
by one or more natural persons or legal
entities that meet prong (i) or (ii) of the
definition of the term ‘‘U.S. person’’ in
the Final Order. For purposes of this
alternative prong (iv), majority-owned
would mean the beneficial ownership of
50 percent or more of the equity or
voting interests in the collective
investment vehicle. The alternative
prong (iv) would include a minor
modification to clarify that it applies
regardless of whether the collective
investment vehicle is organized or
incorporated in the United States.
Similar to the alternative prong (ii)(B)
discussed above, the collective
investment vehicle’s place of
organization or incorporation would not
be determinative of its status as a U.S.
person.
The alternative prong (iv) would
clarify that a pool, fund, or other
collective investment vehicle that is
publicly traded will be deemed a U.S.
person only if it is offered, directly or
indirectly, to U.S. persons. This would
address concerns expressed by
commenters that ownership verification
is particularly difficult for pools, funds,
and other collective investment vehicles
that are publicly traded.26
The alternative prong (iv) would be as
follows:
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(iv) A commodity pool, pooled account,
investment fund, or other collective
investment vehicle that is not described in
prong (ii) and that is directly or indirectly
majority-owned by one or more persons
described in prong (i) or (ii), except any
commodity pool, pooled account, investment
fund, or other collective investment vehicle
that is publicly-traded but not offered,
directly or indirectly, to U.S. persons.
This alternative proposed prong (iv) is
intended to capture collective
investment vehicles that are created for
the purpose of pooling assets from U.S.
investors and channeling these assets to
trade or invest in line with the
objectives of the U.S. investors,
regardless of the place of the vehicle’s
organization or incorporation. These
collective investment vehicles may
serve as a means to achieve the
investment objectives of their beneficial
owners, rather than being separate,
active operating businesses. As such,
the beneficial owners would be directly
exposed to the risks created by the
swaps that their collective investment
vehicles enter into. The Commission
requests comment on all aspects of this
alternative prong (iv).
26 See Letter from Security Industry and Financial
Markets Association (Aug. 27, 2012) at A–20.
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Issued in Washington, DC, on December
21, 2012, by the Commission.
Sauntia S. Warfield,
Assistant Secretary of the Commission.
Appendices to Further Proposed
Guidance Regarding Compliance With
Certain Swap Regulations—
Commission Voting Summary
Note: The following appendices will not
appear in the Code of Federal Regulations.
Appendix 1—Commission Voting
Summary
On this matter, Chairman Gensler and
Commissioners Chilton, O’Malia and Wetjen
voted in the affirmative; Commissioner
Sommers voted in the negative.
[FR Doc. 2012–31734 Filed 1–4–13; 8:45 am]
BILLING CODE 6351–01–P
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Parts 1 and 301
[REG–148873–09]
RIN 1545–BJ16
IRS Truncated Taxpayer Identification
Numbers
Internal Revenue Service (IRS),
Treasury.
ACTION: Notice of proposed rulemaking
and notice of public hearing.
AGENCY:
This document contains
proposed regulations that create a new
taxpayer identifying number known as
an IRS truncated taxpayer identification
number, a TTIN. As an alternative to
using a social security number (SSN),
IRS individual taxpayer identification
number (ITIN), or IRS adoption taxpayer
identification number (ATIN), the filer
of certain information returns may use
a TTIN on the corresponding payee
statements to identify the individual
being furnished a statement. The TTIN
displays only the last four digits of an
individual’s identifying number and is
shown in the format XXX–XX–1234 or
***–**–1234. These proposed
regulations affect filers of certain
information returns who will be
permitted to identify an individual
payee by use of a TTIN on the payee
statement furnished to the individual,
and those individuals who receive
payee statements containing a TTIN.
DATES: Written or electronic comments
must be received by February 21, 2013.
Outlines of topics to be discussed at the
public hearing scheduled for March 12,
2013 must be received by February 20,
2013.
SUMMARY:
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Send submissions to:
CC:PA:LPD:PR (REG–148873–09), Room
5203, Internal Revenue Service, PO Box
7604, Ben Franklin Station, Washington,
DC 20044. Submissions may be hand
delivered Monday through Friday
between the hours of 8 a.m. and 4 p.m.
to: CC:PA:LPD:PR (REG–148873–09),
Courier’s Desk, Internal Revenue
Service, 1111 Constitution Avenue NW.,
Washington, DC 20224 or sent
electronically, via the Federal
eRulemaking Portal at https://
www.regulations.gov (IRS REG–148873–
09). The public hearing will be held in
the Internal Revenue Service
Auditorium, Internal Revenue Service,
1111 Constitution Avenue NW.,
Washington, DC 20224.
FOR FURTHER INFORMATION CONTACT:
Concerning the proposed regulations,
Tammie A. Geier, (202) 622–3620;
concerning submissions of comments,
the public hearing, and/or to be placed
on the building access list to attend the
public hearing, Oluwafunmilayo Taylor
of the Publications and Regulations
Branch at (202) 622–7180 (not toll-free
numbers).
SUPPLEMENTARY INFORMATION:
ADDRESSES:
Background
This document contains proposed
amendments to the Income Tax
Regulations (26 CFR Part 1) and the
Procedure and Administration
Regulations (26 CFR Part 301). These
amendments implement the pilot
program announced in Notice 2009–93
(2009–51 IRB 863), extended and
modified in Notice 2011–38 (2011–20
IRB 785), which together authorized
filers of certain information returns to
truncate an individual payee’s ninedigit identifying number on specified
paper payee statements furnished for
calendar years 2009 through 2012. See
§ 601.601(d)(2).
The pilot program was implemented
in response to concerns about the risk
of identity theft stemming from the
inclusion of a taxpayer identifying
number on a payee statement. In
particular, the risks of misappropriation
and subsequent misuse of that number
were reported to be greatest with respect
to paper payee statements.
I. Information Reporting
Information returns are returns,
statements, forms, or other documents
that must be filed with the IRS to report
transactions (for example, payments,
distributions, or transfers) with another
person in a calendar year. Section
6724(d)(1); Treas. Reg. § 301.6721–
1(g)(1). Persons required to file
information returns with the IRS are
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filers. Treas. Reg. § 301.6721–1(g)(6).
Generally, filers must furnish a
statement to the person on the other
side of the transaction—the payee—
containing the information shown on
the information return filed with the
IRS. See Treas. Reg. § 301.6721–1(g)(5)
(defining ‘‘payee’’ for purposes of
sections 6721 and 6722). The payee may
be the recipient of a payment (as
referred to on Copy B of Form 1099–
MISC, ‘‘Miscellaneous Income’’), a plan
participant receiving distributions (as
referred to on Copy B of Form 1099–R,
‘‘Distributions from Pensions,
Annuities, Retirement or Profit-Sharing
Plans, IRAs, Insurance Contracts, Etc.’’),
a transferor selling or exchanging real
estate (as referred to on Copy B of Form
1099–S, ‘‘Proceeds from Real Estate
Transactions’’), a payer/borrower
making interest payments (as referred to
on Copy B of Form 1098, ‘‘Mortgage
Interest Statement’’), a debtor whose
debt was discharged, canceled or
forgiven (as referred to on Copy B of
Form 1099–C, ‘‘Cancellation of Debt’’),
or a student receiving scholarships,
grants or qualified tuition (as referred to
on Copy B of Form 1098–T, ‘‘Tuition
Statement’’). The statement furnished to
the payee is referred to as a payee
statement. Section 6724(d)(2); Treas.
Reg. § 301.6722–1(d)(2). In certain
circumstances, persons required to file
information returns may file substitute
forms with the IRS and furnish
substitute form statements to payees
rather than use the official IRS forms.
Rev. Proc. 2011–60. See § 601.601(d)(2).
II. Taxpayer Identifying Numbers
Section 6011(a) requires, in part, that
every person required to make a return
or statement shall include therein the
information required by forms or
regulations. Regulations, forms, or
instructions to forms may require that
the filer of an information return
include the identifying number of the
payee on the corresponding payee
statement.
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. A taxpayer
identifying number is also referred to as
a TIN, which section 7701(a)(41) defines
as the identifying number assigned to a
person under section 6109.
Section 6109(a)(3) generally provides
that any person required to make a
return, statement, or other document
with respect to another person shall
request from the other person, and shall
include in the return, statement, or
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other document, the identifying number
as may be prescribed for securing proper
identification of the other person. Thus,
for information reporting purposes, a
filer of an information return must
request a TIN from the payee and
include the TIN on the information
return.
Flush language in section 6109(a)
states that the identifying number of an
individual (or the individual’s estate) is
the individual’s social security account
number. Section 6109(d) provides that,
except as otherwise specified under
regulations, the social security account
number issued to an individual under
the Social Security Act is the identifying
number for individuals for purposes of
the Code. Regulations provide that the
principal types of taxpayer identifying
numbers are SSNs, ITINs, ATINs, and
employee identification number (EINs).
Treas. Reg. § 301.6109–1(a)(1)(i). SSNs,
ITINs, and ATINs are used to identify
individuals. Treas. Reg. § 301.6109–
1(a)(1)(ii). An EIN is used to identify an
individual or other person (whether or
not an employer). Treas. Reg.
§ 301.7701–12.
Summary of Comments
Comments received in response to the
Notices, and other feedback from the
payor community, reflect that filers’
participation in the pilot was positive.
Some filers, however, noted a few
limitations that prevented participation.
Several commentators suggested
expanding the pilot program by
recommending that truncation be
authorized on a greater number of payee
statements, that truncation be permitted
on electronically furnished payee
statements, and that filers be permitted
to truncate an individual payee’s EIN in
addition to the other types of taxpayer
identifying numbers (SSNs, ITINs, and
ATINs) included in the pilot program. A
permanent voluntary program was
encouraged, rather than a mandatory
program. Other commentators suggested
that taxpayers could be adversely
affected by the truncation of their
identifying numbers on payee
statements due to the inability to
identify errors in the first five masked
digits. Also, some state tax authorities
stated that the truncation of taxpayer
identifying numbers on Federal payee
statements that are attached to state
income tax returns might hamper state
income tax processing. Treasury and the
IRS gave serious consideration to the
state government concerns, but
concluded that truncation is unlikely to
hamper state income tax return
processing significantly because the vast
majority of payee statements attached to
state returns are Forms W–2, which are
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not subject to the truncation program,
and because payee information is
available to the states through data
sharing programs with the Federal
government.
All comments were considered in
developing the regulations that, as
proposed, create a permanent truncation
program. The proposed regulations
expand the scope of the pilot program
so that filers are permitted to furnish
payee statements by electronic means.
With regard to including a greater
number of payee statements, the pilot
program and, therefore, the proposed
regulations are limited in scope by
statute. For example, section 6051(a)(2)
requires that the written statement
furnished to employees (Form W–2,
‘‘Wage and Tax Statement’’) show the
name of the employee ‘‘and his social
security account number.’’ Accordingly,
these proposed regulations do not
expand the number of payee statements
included beyond those included in the
pilot program.
Some commentators reported that the
inability to truncate a payee’s EIN on a
payee statement resulted in their
inability to participate in the pilot
program. As described in the comments,
some filers could not differentiate the
type of identifying number assigned to
a payee and/or could not differentiate
numbers belonging to individuals. As
explained in the comments, the affected
filers, because of software limitations,
could either truncate all payee
identifying numbers, including EINs
(whether assigned to an individual or a
corporation, for example), or none at all.
The IRS believes the misuse of EINs is
less frequently an element of identity
theft. As these regulations are proposed
in response to the risk of identity theft
stemming from the inclusion of an
individual’s taxpayer identifying
number on a payee statement, these
proposed regulations do not permit
truncation for numbers that may be
assigned to taxpayers other than
individuals. The IRS seeks further
comments regarding the number of filers
who are unable to differentiate EINs
from payee identifying numbers
belonging to individuals and the
feasibility of making software changes to
address this issue.
Some commentators explained that
their systems could not readily
accommodate truncation (as
exemplified above with respect to EINs)
and that filers of information returns
have varying volume and procedures.
Accordingly, participation in the
truncation program proposed by the
regulations is voluntary.
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Federal Register / Vol. 78, No. 4 / Monday, January 7, 2013 / Proposed Rules
Explanation of Provisions
These proposed regulations create and
allow filers of certain information
returns to use an IRS truncated taxpayer
identification number, a TTIN, to
identify individuals on the payee
statements corresponding to those
information returns. The proposed
regulations provide that the TTIN may
be used in lieu of a payee’s SSN, ATIN,
or ITIN, but use of a TTIN is not
mandatory. A TTIN may be used only
on a payee statement and may be used
on payee statements furnished by paper
or electronic means. A filer may not use
a TTIN on an information return filed
with the IRS. A filer may not truncate
its own identifying number on
information returns or payee statements.
A filer may not truncate a payee’s EIN
under the proposed regulations.
The payee statements on which TTINs
may be included are the same
statements included in the current pilot
program in Notice 2011–38. The current
pilot program includes all statements in
the Forms 1099, 1098, and 5498 series,
with the exception of Form 1098–C,
Contributions of Motor Vehicles, Boats,
and Airplanes, because that form is not
a payee statement but an
‘‘acknowledgement.’’ Any subsequent
changes to the list will appear in
published guidance.
These proposed regulations also
amend certain existing regulations
under sections 6042, 6043, 6044, 6045,
6049, 6050A, 6050E, 6050N, 6050P, and
6050S to specifically authorize the use
of TTINs on payee statements furnished
under those sections. Those regulations
set forth requirements for payee
statements that could be read as
inconsistent with the use of TTINs to
identify payees, in some cases requiring
that the payee be furnished a copy of the
information return filed with the IRS.
Other information reporting regulations
that do not contain provisions
contradictory to the use of TTINs are not
being updated in these proposed
regulations.
Many of the regulations governing the
furnishing of payee statements do not
provide for the use of substitute
statements. These regulations are not
being revised to address substitute
statements at this time. For information
regarding substitute statements, see Rev.
Proc. 2011–60 (2011–52 IRB 934) (or its
successor), republished as Publication
1179, ‘‘General Rules and Specifications
for Substitute Forms 1096, 1098, 1099,
5498, and Certain Other Information
Returns.’’ Rev. Proc. 2011–60 also
contains rules for electronic delivery of
payee statements. Provisions relating to
the use of TTINs in electronically
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furnished payee statements, if any, will
be included in successor revenue
procedures to Rev. Proc. 2011–60. See
§ 601.601(d)(2).
Proposed Effective and Applicability
Dates
These regulations are proposed to take
effect when published in the Federal
Register as final regulations. The rules
in these proposed regulations may be
relied upon by the affected filers before
the publication of the Treasury decision.
Effect on Other Documents
The following publication will be
obsolete as of the date this notice of
proposed rulemaking is published as
final regulations in the Federal Register:
Notice 2011–38, 2011–20 IRB 785.
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), these regulations have
been submitted to the Chief Counsel for
Advocacy of the Small Business
Administration for comment on their
impact on small business.
915
A public hearing has been scheduled
for February 21, 2013 beginning at 10:00
a.m., in the Internal Revenue Service
Auditorium, Internal Revenue Service,
1111 Constitution Avenue NW.,
Washington, DC 20224. Due to building
security procedures, visitors must enter
through the Constitution Avenue
entrance. In addition, all visitors must
present photo identification to enter the
building. Because of access restrictions,
visitors will not be admitted beyond the
immediate entrance area more than 30
minutes before the hearing starts. For
information about having your name
placed on the building access list to
attend the hearing, see the FOR FURTHER
INFORMATION CONTACT section of this
preamble.
The rules of 26 CFR 601.601(a)(3)
apply to the hearing. Persons who wish
to present oral comments at the hearing
must submit written or electronic
comments by February 21, 2013 and an
outline of the topics to be discussed and
the time to be devoted to each topic (a
signed original and eight (8) copies) by
February 20, 2013. A period of ten
minutes will be allotted to each person
for making comments. An agenda
showing the scheduling of speakers will
be prepared after the deadline for
receiving outlines has passed. Copies of
the agenda will be available free of
charge at the hearing.
Drafting Information
The principal author of these
regulations is Tammie A. Geier of the
Office of the Associate Chief Counsel
(Procedure and Administration).
List of Subjects
Comments and Public Hearing
26 CFR Part 1
Before these proposed regulations are
adopted as final regulations,
consideration will be given to any
written (a signed original and eight (8)
copies) or electronic comments that are
submitted timely to the IRS. The
Treasury Department and the IRS
request comments on all aspects of the
proposed regulations. The Treasury
Department and the IRS specifically
request comments on issues
encountered by filers and payees alike,
whether filers should be permitted to
truncate a payee’s EIN and, if so, why
and whether truncation should be
permitted on additional types of payee
statements. The Treasury Department
and the IRS further request that filers
provide details as to whether the
exclusion of EINs from these regulations
prevents them from using TTINs at all.
All comments submitted by the public
will be made available for public
inspection and copying.
Income taxes, Reporting and
recordkeeping requirements.
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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 and 301
are proposed to be amended as follows:
PART 1—INCOME TAXES
Paragraph 1. The general authority
citation for part 1 continues to read as
follows:
■
Authority: 26 U.S.C. 7805 * * *
Par. 2. Section 1.6042–4 is amended
by revising paragraph (b) to read as
follows:
■
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§ 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. 2011–60 (or its
successor) republished as Publication
1179, ‘‘General Rules and Specifications
for Substitute Forms 1096, 1098, 1099,
5498, and Certain Other Information
Returns.’’ See § 601.601(d)(2) of this
chapter. An IRS truncated taxpayer
identifying number (TTIN) may be used
as the identifying number for an
individual recipient. For provisions
relating to the use of TTINs, see
§ 301.6109–4 of this chapter (Procedure
and Administration Regulations).
*
*
*
*
*
■ Par. 3. Section 1.6043–4 is amended
by adding two new sentences to the end
of paragraph (b)(4) to read as follows:
§ 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 for an
individual 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 § 301.6109–4 of
this chapter (Procedure and
Administration Regulations).
*
*
*
*
*
■ Par. 4. Section 1.6044–5 is amended
by adding two new sentences to the end
of paragraph (b) to read as follows:
§ 1.6044–5 Statements to recipients of
patronage dividends.
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*
*
*
*
*
(b) * * * An IRS truncated taxpayer
identifying number (TTIN) may be used
as the identifying number for an
individual 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 § 301.6109–4 of this chapter
(Procedure and Administration
Regulations).
*
*
*
*
*
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Par. 5. Section 1.6045–2 is amended
by adding two new sentences to the end
of paragraph (c) to read as follows:
■
§ 1.6045–2 Furnishing statement required
with respect to certain substitute payments.
*
*
*
*
*
(c) * * * An IRS truncated taxpayer
identifying number (TTIN) may be used
as the identifying number for an
individual 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 § 301.6109–4 of this chapter
(Procedure and Administration
Regulations).
*
*
*
*
*
■ Par. 6. Section 1.6045–3 is amended
by adding two new sentences to the end
of paragraph (e)(1) to read as follows:
§ 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 for an
individual customer. For provisions
relating to the use of TTINs, see
§ 301.6109–4 of this chapter (Procedure
and Administration Regulations).
*
*
*
*
*
■ Par. 7. Section 1.6045–4 is amended
by revising paragraph (m)(1) to read as
follows:
§ 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
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taxpayer identifying number (TTIN)
may be used as the identifying number
for an individual 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 § 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.
*
*
*
*
*
■ Par. 8. Section 1.6045–5 is amended
by adding two sentences before the last
sentence of paragraph (a)(3)(i) to read as
follows:
§ 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 for an
individual 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 § 301.6109–4 of this chapter
(Procedure and Administration
Regulations). * * *
*
*
*
*
*
■ Par. 9. Section 1.6049–6 is amended
by adding paragraph (b)(3) to read as
follows:
§ 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
E:\FR\FM\07JAP1.SGM
07JAP1
Federal Register / Vol. 78, No. 4 / Monday, January 7, 2013 / Proposed Rules
number for an individual person. For
provisions relating to the use of TTINs,
see § 301.6109–4 of this chapter
(Procedure and Administration
Regulations).
*
*
*
*
*
■ Par. 10. Section 1.6050A–1 is
amended by adding two sentences to the
end of paragraph (c)(1) to read as
follows:
§ 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 § 301.6109–4 of this
chapter (Procedure and Administration
Regulations).
*
*
*
*
*
■ Par. 11. Section 1.6050E–1 is
amended by adding two sentences to the
end of paragraph (k)(1) to read as
follows:
§ 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 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 § 301.6109–4 of this
chapter (Procedure and Administration
Regulations).
*
*
*
*
*
■ Par. 12. Section 1.6050N–1 is
amended by adding two sentences to the
end of paragraph (b) to read as follows:
§ 1.6050N–1 Statements to recipients of
royalties paid after December 31, 1986.
wreier-aviles on DSK7SPTVN1PROD with
*
*
*
*
*
(b) * * * An IRS truncated taxpayer
identifying number (TTIN) may be used
as the identifying number for an
individual recipient. For provisions
relating to the use of TTINs, see
§ 301.6109–4 of this chapter (Procedure
and Administration Regulations).
*
*
*
*
*
■ Par. 13. Section 1.6050P–1 is
amended by:
■ a. Removing ‘‘section;’’ from
paragraph (f)(1)(i) and adding ‘‘section.’’
in its place; and
■ b. Adding two sentences to the end of
paragraph (f)(1)(i) to read as follows:
VerDate Mar<15>2010
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§ 1.6050P–1 Information reporting for
discharges of indebtedness by certain
entities.
PART 301—PROCEDURE AND
ADMINISTRATION
*
917
■
*
*
*
*
(f) * * *
(1) * * *
(i) * * * An IRS truncated taxpayer
identifying number (TTIN) may be used
as the TIN of an individual 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 § 301.6109–4 of this chapter
(Procedure and Administration
Regulations);
*
*
*
*
*
■ Par. 14. Section 1.6050S–1 is
amended by:
■ a. Removing ‘‘section;’’ from
paragraph (c)(1)(i) and adding ‘‘section.’’
in its place; and
■ b. Adding two sentences to the end of
paragraph (c)(1)(i) to read as follows:
§ 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 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 § 301.6109–4 of this chapter
(Procedure and Administration
Regulations);
*
*
*
*
*
■ Par. 15. Section 1.6050S–3 is
amended by:
■ a. Removing ‘‘section;’’ from
paragraph (d)(1)(i) and adding
‘‘section.’’ in its place; and
b. Adding two sentences to the end of
paragraph (d)(1)(i) to read as follows:
§ 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 for the individual 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 § 301.6109–4 of this chapter
(Procedure and Administration
Regulations).
*
*
*
*
*
PO 00000
Frm 00009
Fmt 4702
Sfmt 4702
Par. 16. The authority citation for part
301 continues to read as follows:
Authority: 26 U.S.C. 7805.
Par. 17. Section 301.6109–4 is added
to read as follows:
■
§ 301.6109–4 IRS truncated taxpayer
identification numbers.
(a) In general—(1) Definition. An IRS
truncated taxpayer identification
number (TTIN) is an individual’s social
security number (SSN), IRS individual
taxpayer identification number (ITIN),
or IRS adoption taxpayer identification
number (ATIN) that is truncated by
replacing the first five digits of the ninedigit number with Xs or asterisks. The
TTIN is shown in the format XXX–XX–
1234 or ***–**–1234.
(2) Use of a TTIN. (i) A TTIN may be
used by a filer of certain information
returns to identify an individual on the
corresponding payee statement
furnished to the individual, as
authorized by regulations, forms or form
instructions, or other guidance
published by the Internal Revenue
Service. A TTIN may not be used on
payee statements corresponding to the
Form W–2 series, the Form 1098–C
(Contributions of Motor Vehicles, Boats,
and Airplanes), or where identification
of a taxpayer by an SSN, ITIN, or ATIN
is mandated by statute.
(ii) A TTIN cannot be used by a filer
on any information return filed with the
Internal Revenue Service.
(iii) A TTIN may only be used for
identifying individuals assigned SSNs,
ITINs, or ATINs.
(iv) A filer may not truncate its own
taxpayer identifying number on any
document.
(v) Use of a TTIN is permissive and
not mandatory.
(b) Definitions—(1) Filer. A filer
means a person who is required to
report a transaction to the Internal
Revenue Service on an information
return.
(2) Information return. An
information return means the returns,
statements, forms, or other documents
that businesses must file with the
Internal Revenue Service to report
transactions with other persons.
(3) Payee statement. A payee
statement means the copy of the
information set forth on an information
return filed with the IRS that is
furnished to the individual payee,
recipient, participant, transferor, payer/
borrower, debtor, or student, depending
upon the specific reporting
requirements.
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Federal Register / Vol. 78, No. 4 / Monday, January 7, 2013 / Proposed Rules
(c) Effective/applicability date. This
section applies after the date of
publication of the Treasury decision
adopting these rules as final regulations
in the Federal Register. The rules in
these proposed regulations may be
relied upon by the affected filers prior
to the publication of final regulations.
Steven T. Miller,
Deputy Commissioner for Services and
Enforcement.
[FR Doc. 2012–31745 Filed 1–2–13; 4:15 pm]
BILLING CODE 4830–01–P
ENVIRONMENTAL PROTECTION
AGENCY
40 CFR Part 52
[EPA–R10–OAR–2008–0903: FRL–9768–5]
Approval and Promulgation of
Implementation Plans; Oregon: Open
Burning and Enforcement Procedures
Environmental Protection
Agency (EPA).
ACTION: Proposed rule.
AGENCY:
The EPA is proposing to
approve revisions to Oregon’s State
Implementation Plan submitted to the
EPA by the Oregon Department of
Environmental Quality on February 16,
2001, July 14, 2005, August 28, 2006,
and May 20, 2008. The February 16,
2001 submittal relates to open burning
rules. The July 2005, August 2006, and
May 2008 submittals relate to
enforcement procedures, civil penalties,
and procedures in contested cases
(appeals).
DATES: Written comments must be
received on or before February 6, 2013.
ADDRESSES: Submit your comments,
identified by Docket ID No. EPA–R10–
OAR–2008–0903, by any of the
following methods:
• www.regulations.gov. Follow the
on-line instructions for submitting
comments.
• Mail: Justin A. Spenillo, EPA,
Office of Air, Waste, and Toxics, AWT–
107, 1200 Sixth Avenue, Suite 900,
Seattle, Washington 98101.
• Email: R10Public_Comments@epa.gov.
• Hand Delivery: EPA, Region 10
Mailroom, 9th Floor, 1200 Sixth
Avenue, Seattle, Washington 98101.
Attention: Justin A. Spenillo, Office of
Air, Waste, and Toxics, AWT–107. Such
deliveries are only accepted during
normal hours of operation, and special
arrangements should be made for
deliveries of boxed information.
Instructions: Direct your comments to
Docket ID No. EPA–R10–OAR–2008–
wreier-aviles on DSK7SPTVN1PROD with
SUMMARY:
VerDate Mar<15>2010
15:15 Jan 04, 2013
Jkt 229001
0903. The EPA’s policy is that all
comments received will be included in
the public docket without change and
may be made available online at
www.regulations.gov, including any
personal information provided, unless
the comment includes information
claimed to be Confidential Business
Information (CBI) or other information
the disclosure of which is restricted by
statute. Do not submit information that
you consider to be CBI or otherwise
protected through www.regulations.gov
or email. The www.regulations.gov Web
site is an ‘‘anonymous access’’ system,
which means the EPA will not know
your identity or contact information
unless you provide it in the body of
your comment. If you send an email
comment directly to the EPA without
going through www.regulations.gov,
your email address will be
automatically captured and included as
part of the comment that is placed in the
public docket and made available on the
Internet. If you submit an electronic
comment, the EPA recommends that
you include your name and other
contact information in the body of your
comment and with any disk or CD–ROM
you submit. If the EPA cannot read your
comment due to technical difficulties
and cannot contact you for clarification,
the EPA may not be able to consider
your comment. Electronic files should
avoid the use of special characters, any
form of encryption, and be free of any
defects or viruses.
Docket: All documents in the
electronic docket are listed in the
www.regulations.gov index. Although
listed in the index, some information is
not publicly available, i.e., CBI or other
information the disclosure of which is
restricted by statute. Certain other
material, such as copyrighted material is
not placed on the Internet and will be
publicly available only in hard copy
form. Publicly available docket
materials are available either
electronically in www.regulations.gov or
in hard copy during normal business
hours at the Office of Air, Waste and
Toxics, EPA Region 10, 1200 Sixth
Avenue, Seattle, Washington 98101.
FOR FURTHER INFORMATION CONTACT:
Justin A. Spenillo at (206) 553–6125,
spenillo.justin@epa.gov, or the above
EPA, Region 10 address.
SUPPLEMENTARY INFORMATION:
Throughout this document whenever
‘‘we,’’ ‘‘us,’’ or ‘‘our’’ are used, it is
intended to refer to the EPA.
Table of Contents
I. This Action
II. Why are we proposing to approve these
revisions?
PO 00000
Frm 00010
Fmt 4702
Sfmt 4702
A. EPA’s Review of Oregon Administrative
Rules (OAR) Chapter 340, Division 264
Open Burning Rules (February 16, 2001
Submittal)
B. EPA’s Review of OAR Chapter 340,
Division 12 Rules (July 14, 2005 and
August 28, 2006 Submittals)
C. EPA’s Review of OAR Chapter 340
Division 11 Rules (May 20, 2008
Submittal)
D. EPA’s Review of OAR 340–200–0040
(February 16, 2001, July 14, 2005, August
28, 2006, and May 20, 2008 Submittals)
E. EPA’s Review of OAR 340–150–0250
(July 14, 2005 Submittal)
III. Summary of Action
IV. Statutory and Executive Orders Review
I. This Action
Title I of the Clean Air Act (CAA), as
amended by Congress in 1990, specifies
the general requirements for states to
submit State Implementation Plans
(SIPs) to attain and maintain the
National Ambient Air Quality Standards
(NAAQS) and EPA’s actions regarding
approval of those SIPs. In this action,
the EPA is proposing to approve and
incorporate by reference revisions to
Oregon’s open burning rules submitted
by the Oregon Department of
Environmental Quality (ODEQ) on
February 16, 2001. Oregon’s open
burning rules are currently codified at
Oregon Administrative Rules (OAR)
Chapter 340, Division 264.
The EPA is also proposing to approve
but not incorporate by reference (with
certain exceptions explained below) the
enforcement provisions in Chapter 340,
Division 12 submitted by ODEQ on July
14, 2005 and August 28, 2006.
We are also proposing to approve but
not incorporate by reference revisions
related to procedures in contested cases
(that is, appeals from ODEQ actions)
found at OAR Chapter 340, Division 11.
These revisions were submitted by
ODEQ on May 20, 2008.
Each of the above described
submittals (the February 16, 2001, July
14, 2005, August 28, 2006, and May 20,
2008 submittals) contains an
amendment to OAR 340–200–0040,
which describes the State’s procedures
for adopting its Clean Air Act
Implementation Plan and references all
of the state air regulations that have
been adopted by the Environmental
Quality Commission for approval into
the SIP (as a matter of state law),
whether or not they have yet been
submitted to or approved by the EPA.
We are proposing no action on the
revisions to OAR 340–200–0040 in each
of ODEQ’s SIP submittals because it is
unnecessary to take action on a
provision addressing State SIP adoption
procedures and because the federallyapproved SIP consists only of
E:\FR\FM\07JAP1.SGM
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]]>Agencies
[Federal Register Volume 78, Number 4 (Monday, January 7, 2013)]
[Proposed Rules]
[Pages 913-918]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-31745]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Parts 1 and 301
[REG-148873-09]
RIN 1545-BJ16
IRS Truncated Taxpayer Identification Numbers
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Notice of proposed rulemaking and notice of public hearing.
-----------------------------------------------------------------------
SUMMARY: This document contains proposed regulations that create a new
taxpayer identifying number known as an IRS truncated taxpayer
identification number, a TTIN. As an alternative to using a social
security number (SSN), IRS individual taxpayer identification number
(ITIN), or IRS adoption taxpayer identification number (ATIN), the
filer of certain information returns may use a TTIN on the
corresponding payee statements to identify the individual being
furnished a statement. The TTIN displays only the last four digits of
an individual's identifying number and is shown in the format XXX-XX-
1234 or ***-**-1234. These proposed regulations affect filers of
certain information returns who will be permitted to identify an
individual payee by use of a TTIN on the payee statement furnished to
the individual, and those individuals who receive payee statements
containing a TTIN.
DATES: Written or electronic comments must be received by February 21,
2013. Outlines of topics to be discussed at the public hearing
scheduled for March 12, 2013 must be received by February 20, 2013.
ADDRESSES: Send submissions to: CC:PA:LPD:PR (REG-148873-09), Room
5203, Internal Revenue Service, PO Box 7604, Ben Franklin Station,
Washington, DC 20044. Submissions may be hand delivered Monday through
Friday between the hours of 8 a.m. and 4 p.m. to: CC:PA:LPD:PR (REG-
148873-09), Courier's Desk, Internal Revenue Service, 1111 Constitution
Avenue NW., Washington, DC 20224 or sent electronically, via the
Federal eRulemaking Portal at https://www.regulations.gov (IRS REG-
148873-09). The public hearing will be held in the Internal Revenue
Service Auditorium, Internal Revenue Service, 1111 Constitution Avenue
NW., Washington, DC 20224.
FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations,
Tammie A. Geier, (202) 622-3620; concerning submissions of comments,
the public hearing, and/or to be placed on the building access list to
attend the public hearing, Oluwafunmilayo Taylor of the Publications
and Regulations Branch at (202) 622-7180 (not toll-free numbers).
SUPPLEMENTARY INFORMATION:
Background
This document contains proposed amendments to the Income Tax
Regulations (26 CFR Part 1) and the Procedure and Administration
Regulations (26 CFR Part 301). These amendments implement the pilot
program announced in Notice 2009-93 (2009-51 IRB 863), extended and
modified in Notice 2011-38 (2011-20 IRB 785), which together authorized
filers of certain information returns to truncate an individual payee's
nine-digit identifying number on specified paper payee statements
furnished for calendar years 2009 through 2012. See Sec.
601.601(d)(2).
The pilot program was implemented in response to concerns about the
risk of identity theft stemming from the inclusion of a taxpayer
identifying number on a payee statement. In particular, the risks of
misappropriation and subsequent misuse of that number were reported to
be greatest with respect to paper payee statements.
I. Information Reporting
Information returns are returns, statements, forms, or other
documents that must be filed with the IRS to report transactions (for
example, payments, distributions, or transfers) with another person in
a calendar year. Section 6724(d)(1); Treas. Reg. Sec. 301.6721-
1(g)(1). Persons required to file information returns with the IRS are
[[Page 914]]
filers. Treas. Reg. Sec. 301.6721-1(g)(6). Generally, filers must
furnish a statement to the person on the other side of the
transaction--the payee--containing the information shown on the
information return filed with the IRS. See Treas. Reg. Sec. 301.6721-
1(g)(5) (defining ``payee'' for purposes of sections 6721 and 6722).
The payee may be the recipient of a payment (as referred to on Copy B
of Form 1099-MISC, ``Miscellaneous Income''), a plan participant
receiving distributions (as referred to on Copy B of Form 1099-R,
``Distributions from Pensions, Annuities, Retirement or Profit-Sharing
Plans, IRAs, Insurance Contracts, Etc.''), a transferor selling or
exchanging real estate (as referred to on Copy B of Form 1099-S,
``Proceeds from Real Estate Transactions''), a payer/borrower making
interest payments (as referred to on Copy B of Form 1098, ``Mortgage
Interest Statement''), a debtor whose debt was discharged, canceled or
forgiven (as referred to on Copy B of Form 1099-C, ``Cancellation of
Debt''), or a student receiving scholarships, grants or qualified
tuition (as referred to on Copy B of Form 1098-T, ``Tuition
Statement''). The statement furnished to the payee is referred to as a
payee statement. Section 6724(d)(2); Treas. Reg. Sec. 301.6722-
1(d)(2). In certain circumstances, persons required to file information
returns may file substitute forms with the IRS and furnish substitute
form statements to payees rather than use the official IRS forms. Rev.
Proc. 2011-60. See Sec. 601.601(d)(2).
II. Taxpayer Identifying Numbers
Section 6011(a) requires, in part, that every person required to
make a return or statement shall include therein the information
required by forms or regulations. Regulations, forms, or instructions
to forms may require that the filer of an information return include
the identifying number of the payee on the corresponding payee
statement.
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. A taxpayer identifying number is
also referred to as a TIN, which section 7701(a)(41) defines as the
identifying number assigned to a person under section 6109.
Section 6109(a)(3) generally provides that any person required to
make a return, statement, or other document with respect to another
person shall request from the other person, and shall include in the
return, statement, or other document, the identifying number as may be
prescribed for securing proper identification of the other person.
Thus, for information reporting purposes, a filer of an information
return must request a TIN from the payee and include the TIN on the
information return.
Flush language in section 6109(a) states that the identifying
number of an individual (or the individual's estate) is the
individual's social security account number. Section 6109(d) provides
that, except as otherwise specified under regulations, the social
security account number issued to an individual under the Social
Security Act is the identifying number for individuals for purposes of
the Code. Regulations provide that the principal types of taxpayer
identifying numbers are SSNs, ITINs, ATINs, and employee identification
number (EINs). Treas. Reg. Sec. 301.6109-1(a)(1)(i). SSNs, ITINs, and
ATINs are used to identify individuals. Treas. Reg. Sec. 301.6109-
1(a)(1)(ii). An EIN is used to identify an individual or other person
(whether or not an employer). Treas. Reg. Sec. 301.7701-12.
Summary of Comments
Comments received in response to the Notices, and other feedback
from the payor community, reflect that filers' participation in the
pilot was positive. Some filers, however, noted a few limitations that
prevented participation. Several commentators suggested expanding the
pilot program by recommending that truncation be authorized on a
greater number of payee statements, that truncation be permitted on
electronically furnished payee statements, and that filers be permitted
to truncate an individual payee's EIN in addition to the other types of
taxpayer identifying numbers (SSNs, ITINs, and ATINs) included in the
pilot program. A permanent voluntary program was encouraged, rather
than a mandatory program. Other commentators suggested that taxpayers
could be adversely affected by the truncation of their identifying
numbers on payee statements due to the inability to identify errors in
the first five masked digits. Also, some state tax authorities stated
that the truncation of taxpayer identifying numbers on Federal payee
statements that are attached to state income tax returns might hamper
state income tax processing. Treasury and the IRS gave serious
consideration to the state government concerns, but concluded that
truncation is unlikely to hamper state income tax return processing
significantly because the vast majority of payee statements attached to
state returns are Forms W-2, which are not subject to the truncation
program, and because payee information is available to the states
through data sharing programs with the Federal government.
All comments were considered in developing the regulations that, as
proposed, create a permanent truncation program. The proposed
regulations expand the scope of the pilot program so that filers are
permitted to furnish payee statements by electronic means. With regard
to including a greater number of payee statements, the pilot program
and, therefore, the proposed regulations are limited in scope by
statute. For example, section 6051(a)(2) requires that the written
statement furnished to employees (Form W-2, ``Wage and Tax Statement'')
show the name of the employee ``and his social security account
number.'' Accordingly, these proposed regulations do not expand the
number of payee statements included beyond those included in the pilot
program.
Some commentators reported that the inability to truncate a payee's
EIN on a payee statement resulted in their inability to participate in
the pilot program. As described in the comments, some filers could not
differentiate the type of identifying number assigned to a payee and/or
could not differentiate numbers belonging to individuals. As explained
in the comments, the affected filers, because of software limitations,
could either truncate all payee identifying numbers, including EINs
(whether assigned to an individual or a corporation, for example), or
none at all. The IRS believes the misuse of EINs is less frequently an
element of identity theft. As these regulations are proposed in
response to the risk of identity theft stemming from the inclusion of
an individual's taxpayer identifying number on a payee statement, these
proposed regulations do not permit truncation for numbers that may be
assigned to taxpayers other than individuals. The IRS seeks further
comments regarding the number of filers who are unable to differentiate
EINs from payee identifying numbers belonging to individuals and the
feasibility of making software changes to address this issue.
Some commentators explained that their systems could not readily
accommodate truncation (as exemplified above with respect to EINs) and
that filers of information returns have varying volume and procedures.
Accordingly, participation in the truncation program proposed by the
regulations is voluntary.
[[Page 915]]
Explanation of Provisions
These proposed regulations create and allow filers of certain
information returns to use an IRS truncated taxpayer identification
number, a TTIN, to identify individuals on the payee statements
corresponding to those information returns. The proposed regulations
provide that the TTIN may be used in lieu of a payee's SSN, ATIN, or
ITIN, but use of a TTIN is not mandatory. A TTIN may be used only on a
payee statement and may be used on payee statements furnished by paper
or electronic means. A filer may not use a TTIN on an information
return filed with the IRS. A filer may not truncate its own identifying
number on information returns or payee statements. A filer may not
truncate a payee's EIN under the proposed regulations.
The payee statements on which TTINs may be included are the same
statements included in the current pilot program in Notice 2011-38. The
current pilot program includes all statements in the Forms 1099, 1098,
and 5498 series, with the exception of Form 1098-C, Contributions of
Motor Vehicles, Boats, and Airplanes, because that form is not a payee
statement but an ``acknowledgement.'' Any subsequent changes to the
list will appear in published guidance.
These proposed regulations also amend certain existing regulations
under sections 6042, 6043, 6044, 6045, 6049, 6050A, 6050E, 6050N,
6050P, and 6050S to specifically authorize the use of TTINs on payee
statements furnished under those sections. Those regulations set forth
requirements for payee statements that could be read as inconsistent
with the use of TTINs to identify payees, in some cases requiring that
the payee be furnished a copy of the information return filed with the
IRS. Other information reporting regulations that do not contain
provisions contradictory to the use of TTINs are not being updated in
these proposed regulations.
Many of the regulations governing the furnishing of payee
statements do not provide for the use of substitute statements. These
regulations are not being revised to address substitute statements at
this time. For information regarding substitute statements, see Rev.
Proc. 2011-60 (2011-52 IRB 934) (or its successor), republished as
Publication 1179, ``General Rules and Specifications for Substitute
Forms 1096, 1098, 1099, 5498, and Certain Other Information Returns.''
Rev. Proc. 2011-60 also contains rules for electronic delivery of payee
statements. Provisions relating to the use of TTINs in electronically
furnished payee statements, if any, will be included in successor
revenue procedures to Rev. Proc. 2011-60. See Sec. 601.601(d)(2).
Proposed Effective and Applicability Dates
These regulations are proposed to take effect when published in the
Federal Register as final regulations. The rules in these proposed
regulations may be relied upon by the affected filers before the
publication of the Treasury decision.
Effect on Other Documents
The following publication will be obsolete as of the date this
notice of proposed rulemaking is published as final regulations in the
Federal Register:
Notice 2011-38, 2011-20 IRB 785.
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),
these regulations have been submitted to the Chief Counsel for Advocacy
of the Small Business Administration for comment on their impact on
small business.
Comments and Public Hearing
Before these proposed regulations are adopted as final regulations,
consideration will be given to any written (a signed original and eight
(8) copies) or electronic comments that are submitted timely to the
IRS. The Treasury Department and the IRS request comments on all
aspects of the proposed regulations. The Treasury Department and the
IRS specifically request comments on issues encountered by filers and
payees alike, whether filers should be permitted to truncate a payee's
EIN and, if so, why and whether truncation should be permitted on
additional types of payee statements. The Treasury Department and the
IRS further request that filers provide details as to whether the
exclusion of EINs from these regulations prevents them from using TTINs
at all. All comments submitted by the public will be made available for
public inspection and copying.
A public hearing has been scheduled for February 21, 2013 beginning
at 10:00 a.m., in the Internal Revenue Service Auditorium, Internal
Revenue Service, 1111 Constitution Avenue NW., Washington, DC 20224.
Due to building security procedures, visitors must enter through the
Constitution Avenue entrance. In addition, all visitors must present
photo identification to enter the building. Because of access
restrictions, visitors will not be admitted beyond the immediate
entrance area more than 30 minutes before the hearing starts. For
information about having your name placed on the building access list
to attend the hearing, see the FOR FURTHER INFORMATION CONTACT section
of this preamble.
The rules of 26 CFR 601.601(a)(3) apply to the hearing. Persons who
wish to present oral comments at the hearing must submit written or
electronic comments by February 21, 2013 and an outline of the topics
to be discussed and the time to be devoted to each topic (a signed
original and eight (8) copies) by February 20, 2013. A period of ten
minutes will be allotted to each person for making comments. An agenda
showing the scheduling of speakers will be prepared after the deadline
for receiving outlines has passed. Copies of the agenda will be
available free of charge at the hearing.
Drafting Information
The principal author of these regulations is Tammie A. Geier 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 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 and 301 are proposed to be 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 paragraph (b) to read
as follows:
[[Page 916]]
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. 2011-60 (or its
successor) republished as Publication 1179, ``General Rules and
Specifications for Substitute Forms 1096, 1098, 1099, 5498, and Certain
Other Information Returns.'' See Sec. 601.601(d)(2) of this chapter.
An IRS truncated taxpayer identifying number (TTIN) may be used as the
identifying number for an individual recipient. For provisions relating
to the use of TTINs, see Sec. 301.6109-4 of this chapter (Procedure
and Administration Regulations).
* * * * *
0
Par. 3. Section 1.6043-4 is amended by adding two new sentences to the
end of paragraph (b)(4) to 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 for an individual 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).
* * * * *
0
Par. 4. Section 1.6044-5 is amended by adding two new sentences to the
end of paragraph (b) to 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 for an individual 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).
* * * * *
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Par. 5. Section 1.6045-2 is amended by adding two new sentences to the
end of paragraph (c) to 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 as the identifying number for an individual 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).
* * * * *
0
Par. 6. Section 1.6045-3 is amended by adding two new sentences to the
end of paragraph (e)(1) to 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 for an individual customer. For
provisions relating to the use of TTINs, see Sec. 301.6109-4 of this
chapter (Procedure and Administration Regulations).
* * * * *
0
Par. 7. Section 1.6045-4 is amended by revising paragraph (m)(1) to
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 for an individual 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.
* * * * *
0
Par. 8. Section 1.6045-5 is amended by adding two sentences before the
last sentence of paragraph (a)(3)(i) to 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 for an individual 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). * * *
* * * * *
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Par. 9. Section 1.6049-6 is amended by adding paragraph (b)(3) to 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
[[Page 917]]
number for an individual person. For provisions relating to the use of
TTINs, see Sec. 301.6109-4 of this chapter (Procedure and
Administration Regulations).
* * * * *
0
Par. 10. Section 1.6050A-1 is amended by adding two sentences to the
end of paragraph (c)(1) to 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).
* * * * *
0
Par. 11. Section 1.6050E-1 is amended by adding two sentences to the
end of paragraph (k)(1) to 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 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).
* * * * *
0
Par. 12. Section 1.6050N-1 is amended by adding two sentences to the
end of paragraph (b) to 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 for an individual recipient. For
provisions relating to the use of TTINs, see Sec. 301.6109-4 of this
chapter (Procedure and Administration Regulations).
* * * * *
0
Par. 13. Section 1.6050P-1 is amended by:
0
a. Removing ``section;'' from paragraph (f)(1)(i) and adding
``section.'' in its place; and
0
b. Adding two sentences to the end of paragraph (f)(1)(i) to 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 an individual 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);
* * * * *
0
Par. 14. Section 1.6050S-1 is amended by:
0
a. Removing ``section;'' from paragraph (c)(1)(i) and adding
``section.'' in its place; and
0
b. Adding two sentences to the end of paragraph (c)(1)(i) to 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 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);
* * * * *
0
Par. 15. Section 1.6050S-3 is amended by:
0
a. Removing ``section;'' from paragraph (d)(1)(i) and adding
``section.'' in its place; and
b. Adding two sentences to the end of paragraph (d)(1)(i) to 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 for the individual 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).
* * * * *
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--(1) Definition. An IRS truncated taxpayer
identification number (TTIN) is an individual's social security number
(SSN), IRS individual taxpayer identification number (ITIN), or IRS
adoption taxpayer identification number (ATIN) that is truncated by
replacing the first five digits of the nine-digit number with Xs or
asterisks. The TTIN is shown in the format XXX-XX-1234 or ***-**-1234.
(2) Use of a TTIN. (i) A TTIN may be used by a filer of certain
information returns to identify an individual on the corresponding
payee statement furnished to the individual, as authorized by
regulations, forms or form instructions, or other guidance published by
the Internal Revenue Service. A TTIN may not be used on payee
statements corresponding to the Form W-2 series, the Form 1098-C
(Contributions of Motor Vehicles, Boats, and Airplanes), or where
identification of a taxpayer by an SSN, ITIN, or ATIN is mandated by
statute.
(ii) A TTIN cannot be used by a filer on any information return
filed with the Internal Revenue Service.
(iii) A TTIN may only be used for identifying individuals assigned
SSNs, ITINs, or ATINs.
(iv) A filer may not truncate its own taxpayer identifying number
on any document.
(v) Use of a TTIN is permissive and not mandatory.
(b) Definitions--(1) Filer. A filer means a person who is required
to report a transaction to the Internal Revenue Service on an
information return.
(2) Information return. An information return means the returns,
statements, forms, or other documents that businesses must file with
the Internal Revenue Service to report transactions with other persons.
(3) Payee statement. A payee statement means the copy of the
information set forth on an information return filed with the IRS that
is furnished to the individual payee, recipient, participant,
transferor, payer/borrower, debtor, or student, depending upon the
specific reporting requirements.
[[Page 918]]
(c) Effective/applicability date. This section applies after the
date of publication of the Treasury decision adopting these rules as
final regulations in the Federal Register. The rules in these proposed
regulations may be relied upon by the affected filers prior to the
publication of final regulations.
Steven T. Miller,
Deputy Commissioner for Services and Enforcement.
[FR Doc. 2012-31745 Filed 1-2-13; 4:15 pm]
BILLING CODE 4830-01-P
