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On the 2010 1099-misc tax forms, our software is replacing the first five digits of social security numbers with Xs. Is that a new procedure this 2010 reporting year?

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On the 2010 1099-misc tax forms, our software is replacing the first five digits of social security numbers with Xs. Is that a new procedure this 2010 reporting year?

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What you are describing is TIN truncation. For payments in 2010, the IRS ran a pilot program to reduce the threat of identity fraud. They allow payors to issue 1099s to their individual service providers using a truncated version of the social security number, which obscures the first five digits as Xs. A truncated TIN looks like XXX-XX-1234. In order to truncate your payee’s TIN, you must meet the following requirements: • The identifying number being truncated must be a social security number, individual taxpayer identification number, or adoption taxpayer identification number. • The first four digits must be replaced with Xs or asterisks, leaving the final four digits visible. • The truncated identifier number only appears on paper returns sent to the payee. Provided you are meeting these requirements, then there is no problem with the SSNs being truncated. However, the 2011 Instructions for Form 1099-MISC state that the TIN truncation program has ended. So, on payments made in 201

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