When businesses want to onboard new profiles or when banks want to optimize their internal assessment processes to strengthen their protocols, the focus shifts from processes to people. This is due to the increased risk.
Many businesses in the modern century are looking at onboarding verified profiles in order to curb malpractice, ensure compliance, and reduce risk.
By validating the incoming profile during the account opening or recruitment processes, businesses are assessing and averting risk, building a shield of protection to prevent non-compliant profiles and activities from disturbing the compliant ecosystem of the institution.
TIN Matching, the most overlooked tax compliance and regulatory compliance check, is now beginning to gain importance and significance due to its federal compliance factors. For example, banks or financial institutes will not onboard a customer if the social security number or taxpayer-identification number and name combinations do not match the federal records.
TIN Matching is now mandatory-like identity verification check incorporated and embraced by businesses to improve efficiency in the following narratives. Let’s take a look.
When a business wants to onboard a new customer or a vendor or an employee or any other profile, the first priority is to conduct a customer identification process to validate the identities of the incoming profile. Information, such as the SSN/TIN, name, contact information, address, and more is obtained from the profile to establish a basic relationship and validate the details.
Every step after the level-1 identification process is due diligence, boosting your investigative efforts with complex identity checks and profile screening procedures.
When you validate the identities of a profile, you are onboarding profiles that are validated and verified per the official records of the federal agencies. This means every profile you onboard is a verified profile, giving you a boost in your approval rates. This also means that your business or financial institution is onboarding and retaining quality customers with negligible or no risk.
Verifying a profile’s TIN details per the IRS database allows you to check if the TIN details match the IRS records. A step-up check will also allow you to check if the profile is in good standing with the IRS. If you review the financial background of the incoming profile with a priority focus on any civil liabilities, penalties, or consequential notices from the IRS, you will be able to draw your conclusions on the credibility of the profile. This helps you understand the tax risks the profile holds and its impact on your business arrangement with the profile.
The most important and probably the most significant way in which IRS TIN Matching improves your internal processes is through KYC compliance. Every incoming profile, regardless of their history, must furnish the basic KYC details and documentation to support the identity claims. For example, your customer has to furnish the social security administration card issued by the SSA to prove that the customer is the person belonging to the identities specified in the SSA identity proof.
By conducting checks like TIN Matching, Death Master File, Address Validation, and more, you will be able to validate the identities and assess the risk.
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Due diligence with a superior focus on the civil and financial conduct of a profile will help you decipher and assess the risk of a profile in accordance with money laundering, terror financing, drug trafficking, and other restricted activities.
When the TIN Matching results lead you to the conclusion that the profile may have provided incorrect or mismatched details, you can continue to investigate the identities with the OFAC Watch List, Specially Designated Nationals, and Politically Exposed People checks through enhanced due diligence procedures.
It is fair to say that TIN matching is the fundamental focus for many businesses and entities to ensure that the incoming profile is free from all kinds of consequential risks.
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