If you are involved in your organization’s year-end tax filing process, you know the importance of maintaining accurate individual and vendor tax data. Tax Identification Number (TIN) matching is a critical process that can help protect your organization from errors, B-notices and penalties from the IRS. TIN matching typically occurs at two points in a vendor or customer relationship: first, when onboarding a new vendor or customer with information collected on Form W-9, and second, prior to reporting amounts paid on 1099s to ensure TIN/name information is still accurate.

When it comes to onboarding new vendors or customers, TIN Matching is an essential first step. One additional verification with the Death Master File (DMF) can help safeguard your organization from making payments to individuals using false identities of deceased persons.

Verifications against the Death Master File 

TINs assigned to individuals, like Social Security Numbers (SSN), are unique to those individuals and remain with the individual after death. This means SSNs and TINs are never reused or removed from the IRS database once an individual passes.

The Social Security Administration (SSA) created the Death Master File (DMF), which contains over 85 million records of deaths that have been reported to the SSA. Organizations must verify that the TIN/name combination provided by their vendors and payees on a W-9 form does not appear on the DMF. This prevents issuing payments to individuals doing business under a deceased person’s identity. Information such as name, date of birth, SSN and date of death are found in the Death Master File.

It’s worth noting the two different versions of the Death Master File. The public DMF contains records from the SSA NUMIDENT database and is provided to the U.S. Department of Commerce NTIS. It is then sold to banks and credit reporting agencies and does not contain death data from individual states. In comparison, the full DMF also contains records from the SSA NUMIDENT database but includes death data received from states. By utilizing TINCheck to verify your customer data, you are provided with additional information not available on the public DMF.

When companies perform TIN matching, the IRS is aware that a TIN/name match may result in a match for a deceased individual. The IRS became aware of this issue from an outside audit conducted by the Treasury Inspector General for Tax Administration (TIGTA). This audit reviewed the progress the IRS has made in improvements to its federal tax withholding processes and procedures.

During this audit, TIGTA found 2.7 million 1099 forms where the payee being reported was deceased at least three years prior to the issuance of the 1099. Knowing that 2.7 million forms are still being reported with the names and TINs of deceased individuals’, it’s inevitable the IRS will be cracking down to ensure accurate TINs/names are provided and that payments are made while the individual is still alive.

TINCheck can help with TIN and name matching verification for your payees as well as verifying submitted TIN and name information against the Death Master File in real-time and bulk. To learn more about the comprehensive list of TINCheck verifications, or our service offerings, visit tincheck.com/verification-lists/.