IRS to launch prototype of TIN matching program.

• Author: Friedman, Steven M.
• Position: Taxpayer identification number - Brief Article

The IRS has issued proposed and temporary regulations that provide for the establishment of a taxpayer identification number (TIN) matching program (TD 8523). The matching program will enable a payor to contact the Service to verify the correctness of a name-TIN combination furnished by a payee.

The IRS will maintain records on a stand-alone dedicated data base. If the name-TIN combination furnished does not match, payors will have the opportunity to contact payees to obtain corrected information prior to filing the relevant information returns. This should help reduce the number of information returns subject to penalty for containing incorrect information, as well as the number of accounts subject to backup withholding (due to notification by the Service under the B-notice program).

The IRS will initially implement the matching program using a prototype (as described in Rev. Proc. 94-24). The prototype will involve 200 randomly selected payors and one or more Federal government payors. Only payors selected by the Service may participate; however, their participation in the program is completely voluntary. Those payors selected were...