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October 7, 1991
TO: TRANSFER AGENT ADVISORY COMMITTEE NO. 48-91
RE: SIA AND IRS REQUESTS FOR INFORMATION
__________________________________________________________
Recently, the Institute received two requests for
information, one from the Securities Industry Association ("SIA")
and the other from the Internal Revenue Service ("IRS").
Attached to this memorandum is a short survey regarding these
requests that we ask you to complete and fax to Kathleen Joaquin
of our Operations Department at (202) 293-1058.
As you may know, the Institute has endorsed a proposal by
the SIA to extend the due date for sending IRS Forms 1099 to
payees from January 31 to February 15. When the SIA requested a
meeting with the IRS Commissioner to discuss this proposal, they
were asked how many payee statements, that are "incorrect"
because the January 31 deadline does not provide sufficient time
to determine the correct information, would be "correct" if the
deadline were extended to February 15. The SIA has asked us to
help them answer these questions. Thus, the first part of the
survey asks several questions designed to help gather this
information.
In addition, the IRS has asked for information regarding
the likely usage of their planned on-line taxpayer identification
number ("TIN") verification system. As we discussed at the
recent Committee meeting, this TIN verification system will be a
voluntary method of determining, when a new account is opened,
whether the TIN received on an account will "match" the payee's
name. Specifically, payors will be permitted to create a 13
character record -- 4 characters for the so-called "name
control", i.e., the first four letters of the payee's last name,
and 9 characters for the 9 digit TIN (either a social security
number or an employer identification number) -- and transmit
these records electronically to the IRS Martinsburg Computing
Center, which would then immediately respond "match" or "no
match" to each record. The second part of the survey asks for
information that will assist IRS in developing a useful system.
We will keep you informed of developments.
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Keith D. Lawson
Associate Counsel - Tax
Kathleen C. Joaquin
Director - Operations/Fund
Accounting
Attachment