Many people wait with some anxiety for their income tax refund check around this time of year. If you get a big refund then you, in essence, have given the government an interest free loan all year. Still, many taxpayers overpay throughout the year because they have grown accustomed to receiving a refund check, which they see as a form of tax relief.
So what if that check never came? It happens sometimes, and all too often it is the result of identity theft. The IRS has taken numerous steps to prevent identity theft, but it still pays out billions of dollars in erroneous refunds. One of the newest proposals in the fight against identity theft is the Truncated Taxpayer Identification Number, or TTIN.
The TTIN is basically the last four digits of a Social Security Number (SSN) and looks something like this: xxx-xx-4777 or this ***-**-4777. The IRS has issued proposed regulations that would allow certain information return filers to use a TTIN instead of a SSN on their tax documents. The IRS has run a successful TTIN pilot program in the past and it is believed that this will help curb identity theft. Even if the regulations are approved, a full 9-digit SSN will still be required for 1040 income tax returns. The proposed regulation has to do with information returns such as forms 1099, 1098, and 5498.