There are two tools available to taxpayers that will help perfect their payee data before filing Form(s) 1099 with the Internal Revenue Service (IRS) and Form(s) W-2 with the Social Security Administration (SSA). The Taxpayer Identification Number (TIN) Matching Program is offered by the IRS, and The Social Security Number Verification Service (SSNVS) is offered by the SSA.
On-Line Taxpayer Identification Number (TIN) Matching Program
The On-Line Taxpayer Identification Number (TIN) Matching Program is a free web-based tool offered by the IRS through e-services and was established for payers of reportable payments subject to the backup withholding provisions of section 3406 of the Internal Revenue Code. This program allows a participant to check the TIN furnished by the payee against the name/TIN combination contained in the IRS database prior to filing an information return.
There are two TIN matching options offered through e-services:
- Interactive TIN Matching – verify up to 25 name/TIN combinations and results will be received immediately. The user can input name/TIN combinations in groups of 25; there is a limit of 999 requests during a 24 hour period.
- Bulk TIN Matching – verify up to 100,000 name/TIN combinations and results will be received within 24 hours
Prior to completing an application to TIN Match, all prospective users must complete an on-line e-services registration by going to the e-services registration home page.
The Social Security Number Verification Service (SSNVS)
The Social Security Number Verification Service (SSNVS) is a service offered by SSA’s Business Services Online (BSO). It allows registered users (employers and certain third-party submitters) to verify the names and Social Security Numbers (SSNs) of employees against SSA records before preparing and filing Forms W-2. By verifying that the names and SSNs on the Forms W-2 match SSA’s records, an employer may avoid additional processing costs, reduce the number of Forms W-2c that need to be filed, and help ensure proper credit to employees’ earnings records.
There are two Internet verification options to verify that employee names and SSNs match SSA records:
- Verify up to 10 names and SSNs online and receive immediate results. This option is ideal to verify new hires.
- Upload files of up to 250,000 names and SSNs and usually receive results the next business day. This option is ideal for employers that want to verify an entire payroll database or to verify a large number of new hires at one time.
SSNVS is to be used solely to ensure records of current employees (person who has received and accepted a job offer) or former employees are correct for the purpose of completing Form W-2.
- Pub 2108A - On-Line Taxpayer Identification Number (TIN) Matching Program
- Pub 3112 - IRS e-file Application and Participation
- E-services Registration home page
- The Social Security Number Verification Service home page
Issue Indicators or Audit Tips
Determine whether the taxpayer has ever received a CP2100/CP2100A Notice.
Determine how the taxpayer verifies TIN’s for both Form 1099’s and Form W-2’s.
If the taxpayer has received a CP2100/CP2100A Notice request documentation from the taxpayer:
- Request records or files that reflect their procedures followed in response to the notices
- Request the certified/validated responses they received in response to any 1st or 2nd B Notice for tax year(s)
- Request how they identify 1st vs 2nd B Notice Letters to issue
- Request whether they issued notices to all payees listed on the CP2100/CP2100A Notice they received. If not, have them provide an explanation as to the reasons they did not issue a 1st or 2nd B Notice Letter
- Request a statement from the taxpayer regarding the process they have in place to begin backup withholding with respect to payees who failed to respond to their request for verification of the payees’ TINs