New information re: SSNs on tax planners - Tax Practitioner Alert - Social Security numbers - Brief Article

California CPA, Jan-Feb, 2003

A new law intended to protect citizens against identity theft could affect the way you send tax-planning documents to your clients.

CPAs can continue to include Social Security numbers on official government forms that they send to clients, and as of Jan. 1, it appears that you also may include SSNs on planning materials sent to clients, if the SSN is listed for purposes of confirming the SSN.

As of Jan. 1, Sec. 1798.85 of the Civil Code has been amended to read, "... Social Security numbers may be included in applications and forms sent by mail, including documents sent as part of an application or enrollment process, or to establish, amend or terminate an account, contract or policy, or to confirm the accuracy of the Social Security number."

The code allows for "applications and forms" to be sent with SSNs, but legislators do not believe that tax organizers fall into this category. However, they do believe that tax planners could fall into the exemption provided to "confirm the accuracy."

The intent of the law is to eliminate all non-essential use of SSNs in mailed items.

There is no penalty for not complying with the law that was effective Jan. 1, but there would be liability if a client experienced identity theft and financial loss that could be traced to a tax planner's mailing.

For more guidance, contact your liability insurance carrier.

To read the new law, visit www.calcpa.org/members/GR/articles/civilcodel 798text.html.