The IRS has issued notice of proposed regulations that would allow employers to use a truncated Social Security Number (TTIN) on the employee copy of Form W-2, Wage and Tax Statement after December 31, 2018. Comments on the proposed rules are due December 18, 2017. (REG-1005004-16.)

Background

Under the Protecting Americans from Tax Hikes (PATH) Act of 2015 (P.L. 114-113) a number of provisions were included to assist the IRS in curtailing the filing of fraudulent income tax returns by persons who have stolen a taxpayer's Social Security Number (SSN). One such measure was the acceleration to January 31 of the due date for filing Forms W-2 with the Social Security Administration (SSA).

Effective December 18, 2015, another provision of the PATH Act modified Section 6051 giving the IRS authority to allow for the truncation of the SSN on any return, statement or other document that is not required to be furnished to the IRS (or SSA). See our special report.

Proposed regulations

The IRS proposes to amend its regulations to allow for the truncation of the SSN on copies of Form W-2 provided to employees as follows:

— Reg. Section 31.6051-2 would be amended to clarify that employers may not truncate the employee's SSN on Forms W-2 filed with the SSA.

— Reg. Section 31.6051-1 would permit employers to use a truncated SSN on copies of the Form W-2 required under Section 6051(f)(2).

— Reg. Section 31.6051-3 would be modified to clarify that the SSN may not be truncated on statements required to be provided to employers by insurance companies by January 15 detailing the third-party sick payments for the prior year.

— Reg. Section 31.6051-3 would be modified to allow employers to truncate the SSN on Forms W-2 they furnish to employees reporting payments of third-party sick pay.

— Reg. Section 1.6052-2 would be modified to permit employers to truncate the SSN on Forms W-2 they furnish to employees reporting taxable group-term life insurance.

Effective date

These proposed regulations would be applicable to Forms W-2 required to be furnished to employees after December 31, 2018.

Submitting comments

Comments concerning these proposed regulations can be send to CC:PA:LPD:PR (REG-105004-16), room 5203, Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044. Submissions may be hand-delivered between the hours of 8 a.m. and 4 p.m. to CC:PA:LPD:PR (REG-105004-16), Courier's Desk, Internal Revenue Service, 1111 Constitution Avenue, N.W., Washington, DC, or sent via the Federal eRulemaking Portal at www.regulations.gov (REG-105004-16).

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