IRS Pilot Program Truncating TINs
Extended for 2011 and 2012
On April 14, 2011, the IRS issued Notice 2011-38 to announce an extension of the voluntary pilot program that allowed a plan administrator to truncate an individual payee's nine-digit identifying number on paper Forms 1099-R (including substitute and composite substitute statements) issued for calendar years 2009 and 2010. The original pilot program was announced in Notice 2009-93 and you can read our summary on the original pilot program here. In order to allow for more time to evaluate the pilot program, the IRS has extended the program as to paper Forms 1099-R furnished for calendar years 2011 and 2012. As in the prior announcement, Notice 2011-38 does not apply to forms filed with the IRS, electronically furnished payee statements, and payee statements not in the Form 1098, 1099, or 5498 series (such as a Form W-2).
To participate in this program, the following requirements must be met:
- The identifying number must be an SSN, TIN, or adoption TIN;
- The identifying number must be truncated by replacing the first five digits with asterisks or Xs (e.g., "123-45-6789" would be truncated as "***-**-6789" or "XXX-XX-6789"); and
- The truncated identifying number appears on a paper payee statement (including substitute and composite substitute statements) in the Form 1098 (excluding Form 1098-C), 1099, or 5498 series for calendar years 2011 and 2012.
If the requirements are satisfied, then the filer is deemed to have complied with any requirement in Treasury and IRS guidance, whether in regulation, form, or form instructions, to include a payee's identifying number on a payee statement.
The IRS also notes that a filer is authorized to truncate an identifying number on the Forms 1099-R and 5498 notwithstanding the 2011 Instructions for those Forms that say the original pilot program expired.
The public is invited to submit comments by July 29, 2011 concerning the Notice. The IRS is particularly interested in the following: (i) comments from filers who participated in the original pilot program for either calendar year 2009 or 2010; (ii) issues payors and payees have encountered; and (iii) comments on whether payors should be allowed to truncate a payee's EIN, whether truncation should be permitted on additional types of payee statements, and whether payors should be allowed to truncate a payee's identifying number on electronically furnished payee statements.
For additional information about Notice 2011-38 and the pilot program, please contact Mary Beth Braitman, Terry A.M. Mumford, Lisa E. Harrison, Katrina M. Clingerman, or your Ice Miller Employee Benefits attorney.
