The Internal Revenue Service said Tuesday that for tax year 2011, it would require the manual key entry of the Taxpayer Identification Number shown on W-2 forms received from employers for all taxpayers with Individual Taxpayer Identification Numbers who are reporting wages.
The IRS warned that no software package should provide an auto-population feature, regardless of the presence of an override feature, to populate the TIN on the Form W-2 for ITIN filers.
Failure to comply with the requirement could result in a written reprimand, suspension or expulsion from the e-file program, the IRS noted, citing Revenue Procedure 2007-40.
The IRS has been cracking down on all forms of taxpayer and tax preparer fraud, in some cases using identification numbers to trace incidents of errors and omissions.
11 Comments
I think this is a software problem that has to be fixed by software developers before we start the tax season.
Posted by: http://thedebtsreliefreviews.com | March 13, 2013 10:21 AM
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years ago when ITIn applicants were not allowed to efile, the paper tax returns were sent in to the IRS with the W-2's attached. The IRS would manually review the false or fake Social security number used by the ITIn applicant and then manually credit the earnings off the owner of the legit ss number. That is why the IRS wanted no efile of ITIN's, they wanted to input the W2's themselves. They are now giving us their burden and asking us to enter the fake social used by the ITIN clients. There appears to be a problem with some tax software that does not allow more than two social security numbers to be entered in the W2 entry screen. This is a software problem that has to be fixed by software developers before we start the tax season. If this is not fixed we will not be in compliance and our efile authorization could be revoked for preparing ITIN clients wrong. We can not take short cuts and have the Ocr software assume the ITIN number is on the W2 form. Legal or illegal clients is not our concern. It would be a misdemeanor in Arizona to help these ITIn clients because Arizona made being an illegal a crime or those preparing their taxes a crime. But, the ITIn is an IRS provided number and we should help these clients comply with IRS tax regulations. We are not immigration officers. We hardly know enough about taxes without being involved with being immigration officers.
Posted by: zorro1956 | November 29, 2011 1:15 PM
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as an experienced tax preparer I remember when the Irs years ago denied allowing ITIN taxpayers to efile. Then they reversed their position with one condition - that the tax preparer enter the false social the ITIN client was using or the one located on their W-2 form. A return to this preparation procedure is very practical and beneficial to all involved. the earnings earned under the "false" social security number should be credited off the earnings to the true owner of the social security number used by the ITIN applicant. Often times earnings appear to someone's ss account that are not theirs and the correct input of the social security will help eliminate lots of IRS letters and adjustments for earnings not reported or reported incorrectly. Manual input would be a great benefit. It was done and required before if you were around to remember this. Nothing new.
Posted by: zorro1956 | November 29, 2011 1:07 PM
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I don't know abount every one else, but if our company enters an incorrect ss#, the return is sent back rejected because the name and ss# do not match the social security data base. We then have a chance to correct it and resubmit the return. This makes it almost impossible to submit a return where info is auto populated with incorrect social security and or name information.
Posted by: TMCCONNELL | November 28, 2011 6:07 PM
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The regulation as quoted here is incorrect. The actual regulation applies only to returns filed under an INDIVIDUAL TAXPAYER IDENTIFICATION NUMBER (ITIN). By defination, someone filing with only an ITIN does not have a SSN, and cannot work legally in the US. The IRS will accept returns from someone working illegally, but still requires that the (probably incorrect) SSN on the W-2 be disclosed.
See http://www.irs.gov/efile/article/0,,id=242435,00.html
and http://www.irs.gov/individuals/article/0,,id=120580,00.html
Posted by: DonPriebe | November 28, 2011 1:55 PM
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Once again the IRS is making us preparers their super cops, if someone wanted to fraudulently use a SSN they would just key it in different and wouldn't have a care in the world. The IRS should not be using us as their supercops and spend more time going after those who are fraudently filing false returns.
Posted by: jccuk | November 28, 2011 9:59 AM
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So the cost to employeers is going to be more, no surprises here.
Posted by: oldcorps1947 | August 9, 2011 12:17 AM
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I believe that these comments make more sense than the IRS' requirement. As a tax professional, I know that practitioners, and taxpayers have often had situations with a wrong digit or a transposition of digits having occurred when SS#s were keyed in initially, and that wrong number carried forward for many years without checking or correcting. I make it a requirement in my practice that I get a copy of the SS card for all new clients, and their kids and other dependents before I will release a tax return that I prepare. I'm checking the SS#, but also to make sure that the name on the tax return agrees with the name on the SS card. In my 50 years of practice, I have had 3 names that did not agree. And surprisingly it was not married or divorced women, but 3 MEN, all of whom had always used their first initial and middle name throughout their lives.
dlzallestaxes
Posted by: DLZALLESTAXES | August 4, 2011 11:45 AM
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I completely agree with kbyma - computers were invented for this - they will consistantly do the correct thing if programed correctly. I know from experience that each software company has to have the program approved by FORM each and every year. Why do they not approve the W-2 for this "auto-fill" and NOT allow override. Require that the autofill either be the Taxpayer (T) or Spouse (S) a manditory field. This seems to me to have the potential of being more accurate than human keystroke. I'm no rocket scientest but requiring typing "T" or S seems a lot less prone to error than 9 digits on the set-up and for each and every W-2.
Posted by: cdr51 | August 3, 2011 3:56 PM
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It's not accuracy that's in question. it's fraud.
An erroneous TIN can be corrected, a rare inconvenience perhaps, but a fraudulent refund by the unscrupulous, be it a self preparing taxpayer, or a tax preparer, is difficult, if not impossible to recover.
Posted by: tego@verizon.net | August 3, 2011 2:48 PM
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Wouldn't manual entry be more prone to errors than auto-population? How will this increase accuracy?
Posted by: kbyma | August 3, 2011 10:55 AM
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