In TIN matching, the IRS generally checks only the first four characters of a business name or last name when verifying a TIN and name combination. This “first four” rule applies in various situations to improve matching accuracy and flexibility. Here’s how it works in different examples:
1. Business Name Matching:
- For businesses, TIN matching only verifies that the first four characters of the business name match IRS records. This means slight variations or abbreviations that follow the first four characters won’t impact the match result.
- Example:
- Business name on IRS records: “Johnson Technologies Inc.”
- Business name submitted: “Johnson Tech Solutions”
- Result: Match (only the first four characters, “John,” are checked)
- Example 2:
- Business name on IRS records: “ABC Corporation”
- Business name submitted: “ABC Corp”
- Result: Match (first four characters “ABCC” match IRS records)
2. Last Name Matching for Individuals:
- For individuals, the IRS matches only the first four characters of the last name associated with the TIN, allowing for variations in suffixes or minor spelling errors.
- Example:
- Last name on IRS records: “Williams”
- Last name submitted: “Williamson”
- Result: Match (first four characters “Will” match)
- Example 2:
- Last name on IRS records: “O’Conner”
- Last name submitted: “O’Connor”
- Result: Match (first four characters “O’Co” match)
3. Sole Proprietorships:
- For sole proprietorships, the IRS often requires a match between the TIN and the business owner’s last name, rather than the business name itself. Only the first four characters of the owner’s last name are matched.
- Example:
- Legal name on IRS records: “James Smith”
- Business name: “Smith Landscaping”
- Submitted name: “Smith Lawn Care”
- Result: Match (first four characters “Smit” match)
The “first four” rule is helpful because it provides flexibility for common variations or minor errors in name formatting while ensuring that the critical portion of the name is correct. This process reduces mismatches due to minor name differences, but the TIN must still be accurate.
