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Tax News
Systemic Issue Update

Prevent Misread Taxpayer Identification Numbers

In March 2009, we implemented our Systemic Issue Management System. This system allows us to collect taxpayer issues and track the research and resolution. Over the past year, we received many comments and suggestions. In our effort to share the progress and changes we have made from your comments and suggestions, we created this new column, Systemic Issue Update.

Systemic Issue Submission: Payers report information using a nine-digit taxpayer identification number for business returns. Apparently, your system is picking this up as a social security number and generating a notice to file a tax return. The telephone number on the notice can't help with the problem and transfers us to another section. This is a huge expense of time. Can't the system recognize a taxpayer ID and/or a social security number?

Response: Sometimes. We receive and process more than 500 million income records each year. These records belong to individuals, estates, trusts, corporations, etc. To help ensure that taxpayers are properly identified, our reporting requirements instruct payers to provide information about the type of taxpayer (individual, corporation, etc.) who received the record and the type of taxpayer identification number being reported. When a payer correctly provides that type of information, the nonfiler system has no trouble determining what type of identifier has been provided. However, that information is not always available to the payer or the payer provides incorrect information. Taxpayers should review the information provided to employers, customers, and financial institutions to ensure that information is accurate.

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