Illegal??? Or Not???

[WhiteOleander]

Ok, having a friendly disagreement with some collegues.

Some claim that it is actually illegal to photocopy a client's SS card and driver's license to keep in our files. I do this because our office does offer bank products and I want to be able to prove that I did do due diligence to insure the person I am preparing the return and bank product for is actually that person.

However, some say there is actually a law against copying these ID's. Anyone know if that is true?

[Chief]

Copying

If it is true I have never heard of it. When I did bank products copying such documents were required.

[solomon]

I don't know

if it is illegal but it surely does not help the privacy of the client. In addition, Pub 1345 certainly does not require it for e-Filers. I look at picture ID if I do not know the client to verify that is with whom I am dealing.

[Uncle Sam]

Photocopy of ID

All financial institutions are now required to obtain a document proving that the applicant is actually that person - under the Patriot Act.
Every time you now open an account at a brokerage firm, bank, or any other financial institution - this is a requirement.

[Matt Sova]

Not illegal

See the link below for hiring new employees. It states you are not required to, but you may keep a copy of the social security card on file.

http://www.irs.gov/businesses/small/article/0,,id=98164,00.html

[solomon]

My bank

which is Bank of America simply asks to see (not copy) my driver's license or other picture ID each time.

[ChEAr$]

B of A

which is Bank of America simply asks to see (not copy) my driver's license or other picture ID each time.

each time, what? that you do business with them, e.g. make a deposit?
cash withdrawal at local branch?

Of course B of A doesn't even require a customer to have a social security number.
Your Mexican identity card will suffice.

[joanmcq]

My bank requires photo ID too. Even if I'm making a deposit!

[sea-tax]

I am in the investment arena and it has been a requirement for a couple of years now that we verify that our clients are who they say they are. I usually take a copy of driver's license or passport. Never heard this was illegal.

[WhiteOleander]

Ok, it seems most agree that it is not illegal. I knew I certainly had never seen anything about it.

I've even had Drs copy my ID info. With so much identity theft going on, I want to be able to prove that I at least had something to say who the client is.

If someone steals the identity of a person and files a tax return in their name, I think the person whose ID was stolen is surely going to try to sue me for doing the return.

It is very hard to think ahead of the theives. But, I sure don't want to be on the hook for the fraudulent return

[Lion]

Copies

I can't remember who told me the following, maybe an employer or outside auditor for same, but I was once told that I could copy ID documents for our files IF I copied them for ALL clients, but that it was not legal to selectively copy proof of ID, couldn't discriminate.... So, if you're going to copy for just EIC clients or just new clients or some subset of your entire client base, please research your state law as well as federal. And, let us know what you find.