A taxpayer identification number (TIN) is a nine-digit number that the Social Security Administration (SSA) or Internal Revenue Service (IRS) issues to individuals and businesses for tax reporting purposes. Many illegal schemes involve the misuse of a tax identification number, including the use of credit privacy numbers (CPNs) or employer identification numbers (EINs) to obtain personal credit.
Credit Privacy Numbers
The credit privacy number (CPN) is a nine-digit number usually sold under the guise of starting a new credit file for people with bad credit. The CPN is used in place of your Social Security number when applying for credit. Some scam artists sell unused SSNs, while others sell EINs. Either way, obtaining credit using anything other than your own Social Security number is illegal. Using a CPN to obtain credit or report your taxes is illegal. There are no legitimate uses for a CPN.
Using Someone Else's Social Security Number
If a person earns illegal income (for example, from selling drugs or prostitution), that income must be reported by the taxpayer to the Internal Revenue Service (IRS). Although the activity itself is illegal, the IRS doesn't care: You must report the earned income and pay taxes on it. It's a crime in this case to not report the income.
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Using Someone Else's TIN
It is illegal to use anyone else's TIN (including SSNs and EINs) for any purpose, including filing taxes, collecting Social Security benefits and obtaining credit. If you suspect that anyone is fraudulently using your Social Security number, call the SSA at 1-800-772-1213 and ask for a personal earnings and benefit estimate statement. Verify that your expected earnings match what is on the statement. In addition, it's illegal to sell, buy or alter Social Security cards.
Individuals using EINs to Obtain Personal Credit
An employer identification number (EIN) should only be used by the business to which it was issued, but EINs, like personal Social Security numbers, are nine-digit numbers, so they can be used on credit applications as if they were Social Security numbers. Individuals with bad credit sometimes use this loophole to build a credit history using the EIN, which often has no credit history, instead of their personal Social Security number. Using the EIN in this manner is illegal.
People who are not eligible to work legally in the United States can file taxes using an individual tax identification number, or ITIN, a nine-digit number used only for tax reporting. The IRS doesn't want to discourage people from paying taxes (even if they're in the country illegally), so they won't use this number to pursue people who report income. The actual amount collected from illegal immigrants isn't reported by the federal government, but Social Security taxes alone are estimated to be about $9 billion.