A program for truncating Taxpayer Identification Numbers should be extended to Employer Identification Numbers, according to a recommendation from Information Reporting Program Advisory Committee. In its 2013 annual report, the committee says truncating EINs would help prevent identity theft and it also said the IRS should support a proposed bill that would allow Social Security numbers to be truncated on wage reporting forms.Truncating EINs on such statements – including many 1099 forms - would complement the beneficial effects the practice has had with TINs. "This program has assisted in efforts to protect against payees' identity theft and misappropriation of sensitive personal information," the committee wrote in its report to Daniel Werfel, acting commissioner of the Internal Revenue Service..
It also says extending the online TIN Matching program would improve the accuracy of non-wage information reporting and increase the amount of useable data for IRS computer matching compliance activities. It also recommended the IRS extended the TIN program to other forms.
The EIN action would reduce the volume of fraudulent returns, the committee stated. In particular it said that would help with the filing of 1099-OID returns. The use of the Original Discount Form has been frequently used in scams and by tax protesters.
The committee recommended support the adoption of H.R. 1560, the Safe ID Act of 2013. It said the theft of mailed W-2 forms is a primary source of fraudulent returns and truncating SSNs would combat fraud. The report noted the IRS has proposed regulations to support truncating SSNs, ITINs and ATINs.