A taxpayer identification number is assigned to individuals and business entities alike to identify, validate, and verify the real identities of individuals and businesses.
TIN Matching is a process, where the taxpayer identification number is checked to verify if the tax information, namely the taxpayer’s name and their social security number or EIN or any other type of tax identification number matches the IRS records.
This information can also be used to check if a business entity or the self-employed individual is in good standing with the IRS.
TIN Matching plays a huge role in several KYC and customer identification processes. It can help you understand if an entity or an individual comes with a suspicious financial background, such as tax evasion, financial fraud, identity theft, and more.
Today, we will be discussing TIN matching at length including how it benefits businesses in the long haul in terms of eliminating manual workload for CIPs and more.
So, let’s get to it.
TIN Matching: An Overview
TIN Matching helps businesses stay compliant. And this is not just a claim.
You see, a tax identification number is assigned and issued to an individual or a business entity only after they have produced substantial evidence to be eligible for it.
Information such as name, date of birth, place of birth, mailing address, and other proof of identification has to be submitted to the local social security administration office to get the application approved.
Once the SSA officials verify the background of the applicant and thoroughly prove the information provided, the social security number and card are issued to the applicant.
The information provided is saved in the authorized databases of the SSA and IRS right from the date on which one applies for a social security number, helping the federal organizations identify the applicant from the get-go.
Every transaction which bases social security information is recorded and identified by the IRS and other federal organizations for tax reporting and regulatory compliance purposes. The information is also used to check if an individual has violated any civil regulations.
How Does TIN Matching Help Your Business?
When businesses integrate a KYC process, identifying incoming customers, clients, vendors, contractors, and others is prioritized to help accelerate identity verification.
Profiles are scrutinized basing the social security information, including but not limited to TINs, EINs, SSNs, ITINs, PTINs, and more.
TIN Matching helps businesses like yours to check if an individual or a business entity associated with a particular TIN has a record of non-compliant practices and regimes.
It could further help your business avoid high-risk profiles, which may have a prior record of money laundering, engagement in terrorism-financing activities, tax evasion, and other non-compliant activities.
How Can TIN Matching Be Automated?
TIN Matching is a simple process of verifying if the tax details provided by an individual are per the records of the IRS. With the blessing that technology is, TIN Matching is no longer a time-taking hassle.
Many AI-powered identity verification interfaces, such as Compliancely help businesses verify and validate customer and vendor TINs in just a few minutes.
Advantages of Integrating Automated TIN Matching Processes
Determine & Assess Risk
TIN Matching helps you determine if a certain profile is compliant with the IRS. As soon as you search the IRS records, you will be able to see if the profile is flagged. This in turn helps you assess if a particular profile is worth the risk. Keep in mind that high-risk profiles bring in irreparable reputational loss along with financial losses.
Determine Tax Evasion History
TIN Matching allows you to check if the tax details provided by the vendor or customer are following the IRS records. When their profile is not in good standing with the IRS, it can help you further determine if they have a history of tax evasion and related noncompliant reports. This will help you avoid profiles that do not have a compliant tax history.
Determine Regulatory Compliance Risk
Comprehensive TIN matching reports help you understand if a profile associated with the tax details is in good standing with the IRS. This little insight helps you further understand if they have a similar pattern when it comes to regulatory compliance in general. Failure to filing, non-payment of taxes, penalty assessments, and operational prohibitions are some of the many red flags you should be looking for when vetting a profile for tax and regulatory compliance risk.
Streamline Profile Screening Process
An automated TIN matching process helps you organize your profile screening process. Right from the methods you choose to obtain identification details to assessing profile risks, every step of the process will be upgraded to ensure that the profiles are properly vetted before approval. For example, validating TINs during the vendor onboarding process helps you determine if the vendor has provided legitimate tax details, allowing you to avoid year-end rush and TIN discrepancies.
Eliminate False Positive Reports
Many TIN match platforms may claim that their TIN Match reports are authentic. But if the intermediary databases are not in ‘sync’ with the authorized databases of the IRS and SSA, your TIN match searches may render historic or outdated results, complicating your profile vetting process.
How Compliancely Real-Time TIN Matching API Helps Your Business
Compliancely is an authorized regulatory compliance enabler. We power businesses with real-time identity checks, which help you identify, validate, and verify the tax and regulatory compliance records of individuals and entities per the official records of the federal organizations.
With our convenient API, you can outsource your TIN Matching process to Compliancely and have us validate and verify the tax details to ensure tax and regulatory compliance for your business.
Accelerate self-compliance for your business and check 17+ authorized databases to vet your customers, investors, recruits, vendors, and third-party associations.
With Compliancely, you have the necessary resources to validate profiles and assess risk.
Compliancely Helps You To:
- Validate tax details of an entity or individual
- Avoid high-risk profiles
- Determine the severity of risk
- Check tax evasion and money laundering history
- Check identity fraud records
- Identify non-compliant instances associated with a profile
- Vet profiles that threaten the national security of the U.S.
- Check if a profile is listed in federal watch lists
- Assess violation risks and penalty assessments
And the best part is that our infrastructure is highly scalable, allowing you to utilize our checks and reports per your identification requirements and KYC optimizations.
Learn More About Compliancely