Many of my clients hesitate to provide their social security number on a document called the "Sellers Affidavit of Nonforeign Status". This document asks for the sellers social security number and that form is then provided to the buyers. Worries over identity theft are what most of my clients have given as their main concern. While I sympathize with my clients and can understand their concern for this potential risk, the alternative is that they CAN hold back their social security number, but the buyer will then be required to hold back 10% of purchase price for tax purposes!

I have to say that I agree that another method of handling this needs to be found. In the age we live in, playing loose with a social security number can cause all kinds of problems. However, perhaps some comfort can be drawn from the fact that I have never heard of an identity theft case coming from this sort of activity.

So for the sellers out there, keep in mind that this is coming. If your willing to take 10% less - you can stand your ground and keep your social security number to yourself. If not, simply take a few basic steps to safeguard your interests. Give your social security number, but keep track of the buyers. Also keep in mind that the buyers agent and the folks at the escrow company are going to have access to that document. So if the worst happens, you at least will have a narrowed down list of folks to make the authorities aware of. It may not be the best answer to this issue, but until the laws change here (and this is law... at least part of the Internal Revenue Code 1445), this is really the only way to proceed unless you take the 10% hit.

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