Production Tax Credit for Refined Coal (Notice 2009-90)

Part III. Administrative, Procedural, and Miscellaneous
Social Security Contribution
and Benefit Base for 2010
Notice 2009–80
Under authority contained in the Social
Security Act (Act), the Commissioner,
Social Security Administration, has determined and announced (74 F.R. 55614,
dated October 28, 2009) that the contribution and benefit base for renumeration
paid in 2010, and self-employment income
earned in taxable years beginning in 2009
is $106,800.
“Old-Law” Contribution and Benefit
Base

($1,000) by the ratio of the national average wage index for 2008 ($41,334.97)
to that for 1993 ($23,132.67) produces
the amount of $1,786.87. We then round
this amount to $1,700. Accordingly, the
domestic employee coverage threshold
amount is $1,700 for 2010.
(Filed by the Office of the Federal Register on October 27,
2009, 8:45 a.m., and published in the issue of the Federal
Register for October 28, 2009, 74 F.R. 55614)

Production Tax Credit for
Refined Coal
Notice 2009–90
SECTION 1. PURPOSE

General
The “old-law” contribution and benefit base for 2010 is $79,200. This is the
base that would have been effective under
the Act without the enactment of the 1977
amendments.
Domestic Employee Coverage
Threshold
General
The minimum amount a domestic
worker must earn so that such earnings are
covered under Social Security or Medicare
is the domestic employee coverage threshold. For 2010, this threshold is $1,700.
Section 3121(x) of the Internal Revenue
Code provides the formula for increasing
the threshold.
Computation
Under the formula, the domestic employee coverage threshold amount for
2010 shall be equal to the 1995 amount
of $1,000 multiplied by the ratio of the
national average wage index for 2008 to
that for 1993. If the resulting amount is
not a multiple of $100, it shall be rounded
to the next lower multiple of $100.
Domestic Employee Coverage Threshold
Amount
Multiplying the 1995 domestic employee coverage threshold amount

December 21, 2009

This notice sets forth interim guidance
pending the issuance of regulations relating to the tax credit under § 45 of the Internal Revenue Code (Code) for refined coal.
SECTION 2. BACKGROUND
Sections 45(c)(7), (d)(8), and (e)(8) of
the Code provide definitions and rules relating to the tax credit for refined coal (the
refined coal credit). Section 45(e)(8) provides that the refined coal credit increases
a taxpayer’s credit determined under the
other provisions of § 45. The credit is allowed for qualified refined coal (1) produced by the taxpayer at a refined coal production facility during the ten-year period
beginning on the date the facility is originally placed in service, and (2) sold by the
taxpayer to an unrelated person during that
ten-year period.
Sections 45(c)(7), (d)(8), and (e)(8)
were added to the Code by sections 710(a),
(b)(1), and (b)(2), respectively, of the
American Jobs Creation Act of 2004,
Pub. L. No. 108–357. These provisions
were amended by sections 403(t) and
412(j)(1) and (2) of the Gulf Opportunity
Zone Act of 2005, Pub. L. No. 109–135,
and by sections 101 and 108 of the Energy
Improvement and Extension Act of 2008,
Division B of Pub. L. No. 110–343.
SECTION 3. DEFINITIONS, ETC.
The following definitions apply for purposes of this notice:

859

.01 Refined Coal.
(1) In General. Except as otherwise
provided in this section 3.01, the term “refined coal” means fuel that—
(a) is a liquid, gaseous, or solid fuel produced from coal (including lignite) or high
carbon fly ash, including (except to the extent inconsistent with section 3.01(1)(b) of
this notice) such fuel used as a feedstock;
(b) is sold by the taxpayer (producer),
to an unrelated person, with the reasonable
expectation that it will be used for the purpose of producing steam; and
(c) is certified by the taxpayer as resulting (when used in the production of steam)
in a qualified emission reduction.
(2) Steel Industry Fuel. Refined coal
includes steel industry fuel (as defined in
§ 45(c)(7)(C)) that is produced and sold
after September 30, 2008.
(3) Pre-2009 Facilities. Refined coal
does not include fuel (other than steel
industry fuel) that is produced and sold
from a facility placed in service before
January 1, 2009, unless such fuel is
produced in such a manner as to result in
an increase of at least 50 percent in the
market value of the fuel (excluding any
increase caused by materials combined or
added during the production process) as
compared to the feedstock coal.
.02 Coal. The term “coal” means anthracite, bituminous coal, subbituminous
coal, and lignite. Coal includes waste coal
(that is, usable material that is a byproduct
of the previous processing of anthracite,
bituminous coal, subbituminous coal, or
lignite). Examples of waste coal include
fine coal of any of the listed ranks, coal
of any of the listed ranks obtained from a
refuse bank or slurry dam, anthracite culm,
bituminous gob, and lignite waste.
.03 Comparable Coal. The term “comparable coal” means, with respect to any
feedstock coal, coal that is of the same rank
as the feedstock coal and that has an emissions profile comparable to the emissions
profile of the feedstock coal.
.04 Qualified Emissions Reduction.
The term “qualified emissions reduction”
means—
(1) in the case of refined coal produced
at a facility placed in service after December 31, 2008, a reduction of at least 20
percent of the emissions of nitrogen oxide

2009–51 I.R.B.

(NOx) and at least 40 percent of the emissions of either sulfur dioxide (SO2) or mercury (Hg) released when burning the refined coal (excluding any dilution caused
by materials combined or added during the
production process), as compared to the
emissions released when burning the feedstock coal or comparable coal predominantly available in the marketplace as of
January 1, 2003; and
(2) in the case of production at a facility
placed in service before January 1, 2009, a
reduction of at least 20 percent of the emissions of NOx and at least 20 percent of
the emissions of either SO2 or Hg released
when burning the refined coal (excluding
any dilution caused by materials combined
or added during the production process), as
compared to the emissions released when
burning the feedstock coal or comparable
coal predominantly available in the marketplace as of January 1, 2003.
.05 Refined Coal Production Facility.
The term “refined coal production facility”
means—
(a) for purposes of the refined coal
credit allowable with respect to steel
industry fuel, any facility (or any modification to a facility) which is placed in
service before January 1, 2010, and
(b) for purposes of the refined coal
credit allowable with respect to refined
coal other than steel industry fuel, any facility placed in service after the date of the
enactment of the American Jobs Creation
Act of 2004 and before January 1, 2010,
other than a facility producing fuel for
which a credit under § 45K (or under § 29,
as in effect on the day before the date of
enactment of the Energy Tax Incentives
Act of 2005) was allowed for the taxable
year or any prior taxable year.
.06 Related Persons.
Persons are
treated as related to each other if they
would be treated as a single employer
under the regulations prescribed under
§ 52(b). A corporation that is a member
of an affiliated group filing a consolidated
return is treated as selling coal to an unrelated person if the coal is sold to an
unrelated person by another member of
the affiliated group.
.07 Placed in service. The year in
which property is placed in service is determined under the principles of § 1.46–3(d).

2009–51 I.R.B.

SECTION 4. COMPUTATION OF
CREDIT
.01 In General. The refined coal credit
for a taxable year is the tentative credit
for the year determined under this section
4.01, reduced to the extent provided in sections 4.02 and 4.04 of this notice. If the
taxable year is a calendar year, the tentative credit for the taxable year is the tentative credit for the calendar year. If the
taxable year includes parts of two calendar years, the tentative credit for the taxable year is the sum of the tentative credits for each partial calendar year included
in the taxable year. The tentative credit
for any calendar year (or partial calendar
year) is the applicable amount per ton of
qualified refined coal (1) produced by the
taxpayer at a refined coal production facility during the ten-year period beginning on
the date the facility is originally placed in
service, and (2) sold by the taxpayer to an
unrelated person during that ten-year period and during the calendar year (or partial calendar year). The applicable amount
for sales of refined coal during a calendar
year is $4.375 multiplied by the inflation
adjustment factor for the calendar year to
adjust for inflation since 1992.
.02 Limitation of the Credit.
(1) In General. The tentative credit
with respect to sales of refined coal during
a calendar year is reduced by an amount
that bears the same ratio to the tentative
credit as the excess reference price for the
calendar year bears to $8.75.
(2) Excess Reference Price. The excess reference price for a calendar year
is the amount by which (a) the reference
price for the calendar year of fuel used as a
feedstock exceeds (b) an amount equal to
1.7 multiplied by $31.90 and further multiplied by the inflation adjustment factor for
the calendar year.
.03 Reference Price and Inflation Adjustment Factor. The reference price and
inflation adjustment factor for a calendar
year are provided by notice published in
the Internal Revenue Bulletin. See, for
example, Notice 2008–48, 2008–21 I.R.B.
1008.
.04 Reduction for Grants, Tax-Exempt
Bonds, Subsidized Energy Financing and
Other Credits. The tentative credit, after
the reduction, if any, under section 4.02 of
this notice, is reduced by a prescribed percentage if the project received government

860

grants, subsidies, or other credits. The reduction percentage for a tax year is the
lesser of 50 percent or the percentage that
is determined by dividing the sum for the
taxable year and all earlier taxable years of
the four items listed below by the aggregate additions to the capital account attributable to the project for the taxable year
and all earlier taxable years. Those four
items are (1) governmental grants received
for the project; (2) proceeds from tax-exempt state or local government bonds used
to finance the project; (3) directly and indirectly provided subsidized energy financing under a federal, state or local program
in connection with the project and (4) any
other credit allowable with respect to any
property that is part of the project.
SECTION 5. RULES RELATING
TO THE AVAILABILITY OF THE
REFINED COAL CREDIT
.01 Leased Refined Coal Production
Facility. The refined coal credit is allowed for qualified refined coal produced
and sold to an unrelated person by the
taxpayer, without regard to whether the
taxpayer owns the refined coal production
facility in which the refined coal is produced. Accordingly, a taxpayer that leases
or operates a facility owned by another
person may claim the credit for refined
coal that the taxpayer produces in the facility.
.02 Addition or improvement to an existing facility. A refined coal production
facility will not be treated as placed in
service after October 22, 2004, if more
than 20 percent of the facility’s total value
(the cost of the new property plus the
value of the used property) is attributable
to property placed in service on or before
October 22, 2004. The Service will not
issue private letter rulings relating to when
a refined coal production facility has been
placed in service.
SECTION 6. RULES RELATING TO
EMISSION REDUCTION
.01 Emission Reductions Attributable to
Mining Processes Disregarded.
(1) In General. A qualified emission reduction does not include any reduction attributable to mining processes or processes
that would be treated as mining if performed by the mine owner or operator. Accordingly, in determining whether a quali-

December 21, 2009

fied emission reduction has been achieved,
the emissions released when burning the
refined coal must be compared to the emissions that would be released when burning the feedstock coal. Feedstock coal is
the product resulting from processes that
are treated as mining under section 6.01(2)
of this notice and are actually applied by
a taxpayer in any part of the taxpayer’s
process of producing refined coal from
coal.
(2) Processes Treated as Mining. Any
process described in § 613(c)(2), (3),
(4)(A), (4)(C), or (4)(I), or that would
be described in those provisions if performed by the mine owner or operator,
shall be treated as a mining process for
purposes of this notice. Section 613(c)(2)
provides that the term ’mining’ includes
not merely the extraction of the ores or
minerals from the ground but also the
treatment processes considered as mining
described in § 613(c)(4) (and the treatment processes necessary or incidental
thereto). Section 613(c)(3) provides that
extraction of ores or minerals from the
ground includes the extraction by mine
owners or operators of ores or minerals
from the waste or residue of prior mining.
Section 613(c)(4)(A) provides, in the case
of coal, that cleaning, breaking, sizing,
dust allaying, treating to prevent freezing
and loading for shipment by a mine owner
or operator shall be considered as mining.
Section 613(c)(4)(C) provides in the case
of minerals that are customarily sold in the
form of a crude mineral product—sorting,
concentrating, sintering, and substantially
equivalent processes to bring to shipping
grade and form (see § 1.613–4(f)(3)(i))
shall be considered as mining. Section
613(c)(4)(I) provides that the Secretary
may prescribe certain treatment processes
that will be treated as mining; for example, § 1.613–4(f)(5) provides that drying
to remove free water, provided that such
drying does not change the physical or
chemical identity or composition of the
mineral, is treated as mining. Section
613(c)(5) describes treatment processes
that are not considered as mining unless
they are provided for in § 613(c)(4) or
are necessary or incidental to a process
provided for in § 613(c)(4). Any cleaning
process, such as a process that uses ash
separation, dewatering, scrubbing through
a centrifugal pump, spiral concentration,
gravity concentration, flotation, applica-

December 21, 2009

tion of liquid hydrocarbons or alcohol
to the surface of the fuel particles or to
the feed slurry, provided such cleaning
does not change the physical or chemical
structure of the coal, and drying to remove
free water, provided such drying does not
change the physical or chemical identity
of the coal, will be considered as mining.
(3) Exception.
(a) In General. A cleaning process
shall not be treated as a mining process for
purposes of applying this section 6.01 to
refined coal produced from waste coal at a
facility placed in service before January 1,
2010, for the primary purpose of producing
refined coal from waste coal. For purposes
of this section 6.01(3), waste coal means
the waste materials that are separated
through ordinary mining processes during
the process of producing a merchantable
product from the coal extracted from a
natural deposit. This section 6.01(3) does
not apply with respect to the refined coal
produced at a facility during a taxable
year unless a verification of waste coal
supply, as described in section 6.01(3)(b),
is available for such facility.
(b) Verification of Waste Coal Supply.
The verification of the waste coal supply
for a facility required under this section
6.01(3) must contain the following:
(i) The name, address, and telephone
number of the qualified individual.
(ii) A statement that the person providing the verification of the waste coal supply is a qualified individual.
(iii) A statement that the coal to be
processed by the facility is “waste coal”
within the meaning of section 6.01(3)(a).
(iv) A declaration, signed by the qualified individual, in the following form:
“Under penalties of perjury, I declare that I
have examined this verification statement
and, to the best of my knowledge and belief, it is true, correct, and complete.”
(c) Qualified Individual. A qualified
individual for purposes of this section
6.01(3) is an individual that—
(i) is not related (within the meaning
of § 45(e)(4)) to the taxpayer claiming the
refined coal credit;
(ii) is properly licensed as a professional engineer; and
(iii) has the requisite qualifications to
provide the verification required under this
section 6.01(3).
.02 Basis for Determining Emission Reduction.

861

(1) In General. Emission reductions are
determined by comparing the emissions
that result when feedstock coal and refined
coal are used to produce the same amounts
of useful thermal energy.
(2) Emissions Resulting from Production Process. Emissions that result from
the process of producing refined coal from
feedstock coal are treated for purposes of
this section 6.02 as emissions that result
when the refined coal is used to produce
useful thermal energy. In any case in
which waste heat from an activity other
than the production of refined coal is used
in the process of producing refined coal
from feedstock coal, the emissions associated with the waste heat are not treated as
emissions that result from such process.
The emissions that result when refined
coal is produced from feedstock coal must
be determined using a method that accurately measures such emissions.
(3) Adjustment for Additives. In any
case in which additives are used to produce the refined coal, appropriate adjustment must be made in determining the useful thermal energy produced by the refined
coal.
.03 Emission Reduction Testing Methods.
(1) CEMS Field Testing.
(a) In General. The emissions reduction may be determined using continuous
emission monitoring system (CEMS) field
testing. CEMS field testing is testing that
meets all the following requirements:
(i) The boiler used to conduct the test is
coal-fired and steam-producing and is of a
size and type commonly used in commercial operations.
(ii) Emissions are measured using a
CEMS.
(iii) If EPA has promulgated a performance standard that applies at the time
of the test to the pollutant emission being
measured, the CEMS must conform to that
standard.
(iv) Emissions for both the feedstock
coal and the refined coal are measured at
the same operating conditions and over a
period of at least 3 hours during which the
boiler is operating at a steady state and at
least 90 percent of full load.
(v) Emissions of SO2 are measured upstream of any SO2 scrubber.
(vi) Emissions of Hg are measured upstream of any SO2 scrubber or Hg control
device (such as activated carbon injection).

2009–51 I.R.B.

(vii) Emissions of NOx are measured
upstream of any NOx controls.
(viii) A qualified individual verifies the
test results in a manner that satisfies the
requirements of section 6.03(1)(b) of this
notice.
(b) Verification of Test Results. A verification of test results for purposes of this
section 6.03(1) must contain the following:
(i) The name, address, and telephone
number of the qualified individual.
(ii) A statement that the person providing the verification of test results is a qualified individual.
(iii) A statement that the testing satisfied all the requirements specified in section 6.03(1)(a)(i) through (vii) of this notice.
(iv) A statement that the amount of the
emissions reduction was determined in accordance with the provisions of section
6.01 and section 6.02 of this notice.
(v) A declaration, signed by the qualified individual, in the following form:
“Under penalties of perjury, I declare that I
have examined this verification statement
and, to the best of my knowledge and belief, it is true, correct, and complete.”
(c) Qualified Individual. A qualified
individual for purposes of this section
6.03(1) is an individual that—
(i) is not related (within the meaning
of § 45(e)(4)) to the taxpayer claiming the
refined coal credit;
(ii) is properly licensed as a professional engineer; and
(iii) has the requisite qualifications to
provide the verification required under this
section 6.03(1).
(d) Reliance Permitted. If CEMS field
testing is used to determine the emissions
reduction, the IRS will not, on examination, require any additional proof of the
emission reduction achieved. The IRS
may, however, require the taxpayer to establish that the testing used qualifies as
CEMS field testing.
(2) Other Testing Methods. Methods
other than CEMS field testing may be used
to determine the emissions reduction. If a
method other than CEMS field testing is
used, the IRS may require the taxpayer to
provide additional proof that the emission
reduction has been achieved. Permissible
methods include the following:
(i) A testing method using a demonstration pilot-scale combustion furnace if
it is established that the method accurately

2009–51 I.R.B.

measures the emissions reduction that
would be achieved in a boiler described in
section 6.03(1)(a)(i) of this notice and a
qualified individual verifies the test results
in a manner that satisfies the requirements
of section 6.03(1)(b)(i), (ii), (iv), and (v)
of this notice.
(ii) Laboratory analysis of the feedstock
coal and the refined coal. The laboratory
analysis must comply with a currently applicable EPA or ASTM standard and may
be used only for purposes of determining
the emissions reduction for SO2 and Hg.
.04 Frequency of Testing.
(1) In general. A taxpayer may establish that a qualified emissions reduction
determined under section 6.03 of this notice applies to production from a facility by
a determination or redetermination that is
valid at the time the production occurs. A
determination or redetermination is valid
for the period beginning on the date of the
determination or redetermination and ending with the occurrence of the earliest of
the following events:
(i) The lapse of six months from the date
of such determination or redetermination.
(ii) A change in the type, source, or rank
of feedstock coal that occurs after the date
of such determination or redetermination.
(iii) A change in the process of producing refined coal from the feedstock coal
that occurs after the date of such determination or redetermination.
(2) Redetermination methods. In the
case of a redetermination required because
of a change in the process of producing refined coal from the feedstock coal, the redetermination required under this section
6.04 must use a method that meets the requirements of section 6.03 of this notice.
In any other case, the redetermination requirement may be satisfied by laboratory
analysis establishing that the SO2 and Hg
content of both the feedstock coal and the
refined coal do not vary by more than ten
percent from the SO2 and Hg content of
the feedstock coal and refined coal used in
the most recent determination that meets
the requirements of section 6.03 of this notice.
.05 Certification of emissions reduction. The certification requirement of
section 3.01(1)(c) of this notice is satisfied
with respect to fuel for which the refined
coal credit is claimed only if the taxpayer
attaches to its tax return on which the

862

credit is claimed a certification that contains the following:
(1) A statement that the fuel will result
in a qualified emissions reduction when
used in the production of steam.
(2) A statement indicating whether
CEMS field testing was used to determine
the emissions reduction.
(3) If CEMS field testing was not used
to determine the emissions reduction, a description of the method used.
(4) A statement that the emissions reduction was determined or redetermined
within the six months preceding the production of the fuel and that there have been
no changes in the type, source, or rank
of feedstock coal used or in the process
of producing refined coal from the feedstock coal since the emissions reduction
was determined or was most recently redetermined.
(5) A declaration signed by the taxpayer
in the following form: “Under penalties of
perjury, I declare that I have examined this
certification and to the best of my knowledge and belief, it is true, correct, and complete.”
SECTION 7. RECORDKEEPING
Section 6001 provides that every person liable for any tax imposed by the
Code, or for the collection thereof, must
keep such records, render such statements,
make such returns, and comply with such
rules and regulations as the Secretary may
from time to time prescribe. The books
and records required by § 6001 must be
kept at all times available for inspection
by authorized internal revenue officers
or employees, and must be retained so
long as the contents thereof may become
material in the administration of any internal revenue law. In order to satisfy the
recordkeeping requirements of § 6001 and
the regulations thereunder, a taxpayer that
claims the refined coal credit must retain
adequate books and records so that, for
any taxable year, it can be verified from
those books and records that the property
with respect to which the credit is claimed
satisfies the applicable requirements of
§ 45 and this notice.
SECTION 8. REQUEST FOR
COMMENTS
The IRS and the Treasury Department
invite comments concerning section 6.03

December 21, 2009

of this notice relating to emission reduction testing methods. Comments should
refer to Notice 2009–90 and be submitted
to:
Internal Revenue Service
CC:PA:LPD:PR (Notice 2009–90)
Room 5203
P. O. Box 7604
Ben Franklin Station
Washington, DC 20044
Submissions may be hand delivered
Monday through Friday between the hours
of 8 a.m. and 4 p.m. to:
Courier’s Desk
Internal Revenue Service
1111 Constitution Ave., N.W.
Washington, DC 20224
Attn: CC:PA:LPD:PR
(Notice 2009–90)
Alternatively,
taxpayers
may
submit comments electronically to
notice.comments@irscounsel.treas.gov.
Please include “Notice 2009–90”
in the subject line of any electronic
communications.
All comments will be available for public inspection and copying.
SECTION 9. EFFECTIVE DATE
This notice is effective for refined coal
produced after December 7, 2009. Taxpayers may apply the provisions of this notice with respect to refined coal produced
on or before December 7, 2009.
SECTION 10. PAPERWORK
REDUCTION ACT
The collection of information contained
in this notice has been reviewed and approved by the Office of Management and
Budget (OMB) in accordance with the Paperwork Reduction Act (44 U.S.C. § 3507)
under control number 1545–2158.
An agency may not conduct or sponsor,
and a person is not required to respond
to, a collection of information unless the
collection of information displays a valid
OMB control number.
The collection of information in this notice is in section 6 of this notice. This information will be used by the Service to
verify that the taxpayer is eligible for the

December 21, 2009

production tax credit for refined coal. The
collection of information is required to obtain a benefit. The likely respondents are
businesses or other for-profit institutions.
The estimated total annual reporting
burden is 15 hours.
The estimated annual burden per respondent varies from 10 to 20 hours, depending on individual circumstances, with
an estimated average of 15 hours. The estimated number of respondents is 100.
The estimated annual frequency of responses is on occasion.
Books or records relating to a collection
of information must be retained as long
as their contents may become material in
the administration of any internal revenue
law. Generally, tax returns and return information are confidential, as required by
26 U.S.C. § 6103.
SECTION 11. DRAFTING AND
CONTACT INFORMATION
The principal author of this notice is
Philip Tiegerman of the Office of Associate Chief Counsel (Passthroughs and
Special Industries). However, other personnel from the IRS and Treasury participated in its development. For further
information regarding this notice, contact
Mr. Tiegerman at (202) 622–3110.

Truncating Social Security
Numbers on Paper Payee
Statements
Notice 2009–93
SECTION 1. PURPOSE
This notice creates a pilot program
allowing filers of information returns to
truncate an individual payee’s nine-digit
identifying number on paper payee statements for calendar years 2009 and 2010 if
the filers meet the requirements set forth
in this notice. This notice only applies to
paper payee statements in the Form 1098
series, Form 1099 series, and Form 5498
series. Filers who meet the requirements
in this notice will be treated as having
satisfied any requirement in Treasury and
IRS guidance, whether in a regulation,
form, or form instructions, to include a
payee’s identifying number on a payee

863

statement. This notice also invites public
comment.
SECTION 2. BACKGROUND
An information return is a return, statement, form, or other document that must
be filed with the IRS to report certain
payments or distributions to a payee or
amounts received from a payee in a calendar year. See section 6724(d)(1); Treas.
Reg. § 301.6721–1(g)(1). A filer is any
person required to file an information return. See Treas. Reg. § 301.6721–1(g)(6).
A payee is any person who is required
to receive a copy of the information set
forth on an information return by the
filer of the return. See Treas. Reg.
§ 301.6721–1(g)(5). A filer generally
must also furnish a payee statement to
each payee that contains the same information as the information return for that
payee. See section 6724(d)(2); Treas.
Reg. § 301.6722–1(d)(2). Generally, filers
are required to furnish payee statements to
payees on or before January 31st (in some
instances on or before February 15th) of
the year following the calendar year for
which the information return is made. See,
e.g., sections 6041(d) and 6042(c). Filers
may be subject to penalties for failure to
file correct information returns or furnish
correct payee statements. See sections
6721 and 6722.
Regulations, forms, or instructions to
forms typically require that the payee
statement include the identifying number
of the payee. The three types of identifying numbers applicable to individuals
are social security numbers, IRS individual taxpayer identification numbers,
and IRS adoption taxpayer identification
numbers. All three of these identifying
numbers are nine-digit numbers taking
the form 000–00–0000. Treas. Reg.
§ 301.6109–1(a)(1)(i).
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.

2009–51 I.R.B.