Numbers, Numbers, Numbers—ITINs, SSNs: What Can You Accept?
The FELS’ offices receive many calls from Newsletter subscribers and FELS clients and customers seeking clarification about the many different kinds of cards and numbers employees and potential employees present for purposes of identification, employment eligibility, and tax-reporting compliance.
Some of the more common questions and their answers:
- In the Form I-9 process, a newly hired employee showed me a Social Security Card whose number begins with 9. Is that a valid Social Security Number for the purpose of establishing employment eligibility verification? No, it is not. The Social Security Administration does not issue Social Security Cards beginning with the number 9. That means the card is probably fraudulent, perhaps bearing an authentic Individual Taxpayer Identification Number (ITIN) issued by the Internal Revenue Service. An ITIN always begins with 9. This card might have been created in the hope an employer such as you might not know this, would accept it as a List C document establishing employment authorization, and would then report to taxing authorities the employee’s earnings using the ITIN.
- On the IRS Form W-4 he submitted for income tax withholding allowances, an employee wrote for his Social Security Number a number that begins with 9. Should I accept it? No, you should not. Because it starts with 9, the number in question cannot be a Social Security Number. It might, however, be an Individual Tax Identification Number (ITIN). An ITIN is issued by the Internal Revenue Service to an individual who is not eligible to get a Social Security Number but who has non-wage income that must be reported to the IRS. An individual with an ITIN is not supposed to be employed in the U.S.; an employment-authorized individual should have a Social Security Number (and a Social Security Card).
This situation may call into question the validity of the documentation the employee showed when you were verifying his employment eligibility on Form I-9. Agricultural employees often use a List A document such as a Permanent Resident Card—commonly called a Green Card—to establish identity and employment authorization. While not all Green Cards offered by agricultural employees are fraudulent, it is possible that if this individual is offering you either an ITIN or a non-conforming Social Security Number for payroll-tax compliance purposes, he may also have presented an invalid Green Card when you were verifying his identity and employment authorization in Section 2 of Form I-9 (remember, employment-authorized individuals are issued Social Security Cards to permit them to report their earnings.) And, of course, if the individual offered as a List C employment-eligibility document a putative Social Security Card whose number begins with 9, along with a driver’s license as a List B identity document, there is a clear problem with the validity of the Social Security Card used for that individual’s Form I-9.
- An employee’s IRS Form W-4 shows for his Social Security Number a number he says is an ITIN that begins with 9. May I report his earnings with this number? No. Again, an ITIN is intended to enable people who are not employment authorized to report non-wage income to the IRS. An ITIN is not intended to report earned income. An individual authorized to be employed in the U.S. will be issued a Social Security Card.
What to do?
- Don’t ignore the situation: While it is not clear to what degree the IRS and Immigration and Customs Enforcement (ICE) share information, it is likely that ICE agents are aware of the types of payroll-tax reporting numbers that are available to individuals who are employment authorized, and to those who are not.
- Review Your Forms I-9: ICE might regard a Form I-9 of an employee lacking employment eligibility that shows as the List C document a Social Security Card with a number beginning with 9 as evidence that you had constructive knowledge of that lack. Confer promptly with counsel to decide how to proceed.
- Look for Appropriate Additional Documentation: If the employee in question has offered a Social Security Card indicating it is valid only with an employment authorization, be sure you examine that employment-authorization documentation. If the employee can’t or won’t produce that documentation, that employee’s employment authorization is questionable.
- Discharge an Employee Who Admits he is not Eligible to be Employed in the U.S.: An employee confronted with possibly fraudulent documents might admit he is not employment authorized. In this instance, you must fire that employee.
There are resources available to help you sort out what number is intended for what purpose:
- This article from Thompson Reuters Tax & Accounting Blog “Ask the Expert: Is it a problem that we have received a Form W-9 with a taxpayer ID number starting with a “9”?” offers a good explanation of what an ITIN is and what it’s meant to do.
- This article from the Social Security Administration website explains the agency’s policy with respect to the numbering system it uses for Social Security Cards.
As always, if you have questions about documents employees present, please call us at FELS at 800-753-9073 or email us at firstname.lastname@example.org; we’re here to help