IRS Information Returns: An Identity Thief's Dream?: Via Privacy Rights Clearinghouse.

An “information return” is used to report certain income and financial transactions to the IRS.  A copy must be mailed to the taxpayer.  Most people are familiar with W-2 Forms, which employers use to report wages and tips of employees.  However, there are many other types of income that must be reported on other IRS information returns.  For example, there are over 30 variations of IRS Form 1099. 

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Until 2009, the IRS required that all information returns contain a full Social Security number.  A voluntary IRS pilot project will allow businesses to truncate (shorten to 4 digits) Social Security numbers on some information returns.  (Read the IRS's 2009/93 Notice on the pilot program.)  In implementing the pilot program, the IRS notes: “A person’s identifying number is sensitive personal information.  A risk exists that this information could be misappropriated from a payee statement and misused in various ways, such as to facilitate identity theft.  In an effort to minimize this risk, this notice creates a pilot program allowing truncation of individual identifying numbers on certain paper payee statements.” 

Read Original Article:(Via Privacy Rights Clearinghouse.)