From: Black Unicorn <unicorn@schloss.li>
Date: Thu, 14 Nov 1996 18:45:55 -0800 (PST)
To: putney <putney@rigel.infonex.com>
Subject: Re: Validating SSNs
In-Reply-To: <Pine.SOL.3.91.961113202851.18335A-100000@rigel.infonex.com>
Message-ID: <Pine.SUN.3.94.961114214245.24555B-100000@polaris>
MIME-Version: 1.0
Content-Type: text/plain


On Wed, 13 Nov 1996, putney wrote:

> >At 4:13 PM 11/13/96, Black Unicorn wrote:
> 
> >>Exercise for the reader:  How does the bank verify SSNs?
> 
> >OK, I'll bite.
> 
> >My guess is that the bank sticks the SSN in a report to the IRS and the
> >bank is happy with the SSN as long as the IRS doesn't complain about it.
> 
> >Now, does the IRS check? I suspect that they don't, either. Their objective
> >is to look for "matches" with SSNs that show up on filed tax forms, since
> >they want to verify the data on the tax form. Given the behavior of every
> >other large database I've ever seen, I'd guess that there would be a huge
> >number of SSNs that don't in fact associate with tax forms. If someone High
> >Up hasn't decreed that they should chase such things down (and allocated
> >heaps of money to do it), they'll ignore the mismatches.
> 
> >This seems consistent with the reports of people who use bogus SSNs for
> >decades at a time.
> 
> >Rick.
> >smith@sctc.com
> 
> Yup - You've got it right.  A bank's responsibility is to make the SSN 
> match on tape with what the IRS has - thats it.  It was part of the big 
> stink in the 80's when congress first said that all banks had to withhold 
> on all interest, the banks yelled, and then the SSN match program was 
> instituted.

Wrong.  A bank's responsibility is to report the SSN given to the IRS and
forget about it until told to do otherwise.

> 
> There are significant fines for banks that do not follow up on 
> mis-matches, or do not begin "back-up" withholding.  One person is no big 
> deal, but they add up fast!

There are fines for refusing to comply with IRS directives to do so.
There is no direct responsibility for financial institutions in the
United States to investigate the SSN their customer provides other than to
complain to the depositor.

> The IRS's job is to collect income so if the number matches with a filing 
> then a-okay!
> 
> Yo.
> 
> Putney

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