Tenant social security number.

31 Replies

Will you make a copy of tenant social security card when they move in? Because i've heard that you need ssn of the tenant at court for eviction. I make copy of tenants ID but never asked for ssn because they applied through Cozy and filled out all of that to get pulled the credit report and background checks. 

Thanks.

@Niki Cao That is why I only use paper applications with all their information and original signature. I file it with the lease in a folder for the property.

I have to meet with them anyway to show the property so I get this in person along with application fee.

I always took the number and would warn them that any uncollected money for damages or past due rent would be reported to the IRS as "forgiven debt". I'd point out that I wouldn't take the time or trouble to get a WORTHLESS judgement against them. I'd just report the forgiven debt to the IRS, because unlike me the never sleep and they never forget. I always collected all my money from anyone who received that speech.

I get the numbers on my .pdf copies I email out. I find that some are more comfortable with this than typing it into a "web-based" form. This is why I like starting out with the paper (.pdf) application and then moving them onto Cozy as they qualify. It also helps to weed through the B.S.'ers and no showers. I would never want a copy of their actual card...

Originally posted by @Frank Adams :

I always took the number and would warn them that any uncollected money for damages or past due rent would be reported to the IRS as "forgiven debt". I'd point out that I wouldn't take the time or trouble to get a WORTHLESS judgement against them. I'd just report the forgiven debt to the IRS, because unlike me the never sleep and they never forget. I always collected all my money from anyone who received that speech.

 Interesting.  

I was curious as to how permissible this actually is.  After checking here  ( https://www.irs.gov/taxtopics/tc431 ) it seems it might just be an appropriate use of that tax code.  Although, from what I've read, it appears the debt holder has a responsibility to mail a form 1099-C to the debtor -- it seems that simply informing the debtor at lease signing of your intent to use "forgiven debt" isn't enough to be completely above board.

Still, this looks useful.

Thanks

Have you run this by an accountant?  Just curious if it has been vetted by someone in the know.  

@Niki Cao I’ve been through the whole process in Colorado. From 3day notice to court ordered and Sharif Eviction. I never needed the social security number to do any of that. The 3 day has a name and the address. The documents you file with the court are the same. I’ve never seen anything asking for a social of my tenants.

@Niki Cao it’s on there. It’s up to them if they put it in or not. Doesn’t make a difference to me. I do get a copy of their drivers license. If you are doing background checks they will put it in on the website or make sure it’s on their of you are doing background checks. You don’t want to be holding copies of people’s Socials. That information you gathered could get into someone else’s hands that knows how to use them for fraud.

@Niki Cao the Cozy application is lacking in detail, so I always require a long form paper copy that has way more details. I always ask to see their SS card and drivers license so I can take a photo of both. Cozy doesn't share this information. You want to have the SS in case you need to skip trace. My application gives me the right to run their credit AFTER they are a tenant or in pursuit of debt collection in the future. Credit report usually has current address, so it makes it hard to hide.

@Frank Adams it is rare I hear a new idea on BP, but this is the first time I have heard of using the threat of IRS reporting of forgiven debt as a way to get people to pay. Do you know, if you were to report it to the IRS as 1099C income, is there any special burden of proof the landlords needs? 

I am guessing from a landlord perspective there is no tax benefit to reporting forgiven debt. If someone owes me rent, I have not claimed it as income, so there is corresponding loss to claim. Or is there some tax benefit here that I am not understanding?

Joe Splitrock and Nicky Cao. I did send them 1099s which because it looked so official would cause them to cough up !y money.

I learned this idea when I was working s corporate gig at a company that had a highly compensated salesforce. When they signed for their sales gear they were acknowledging that our catalog was valued at $1,000 (1978 dollars) and if they didn't return it, or took it with them to a competitor they would be liable for that amount. Our attorney and CFO hatched that plan and only went to court once to enforce it that I can recall.

As to risk associated with holding someone’s ss#- if you can’t be trusted to keep that secure you have no business being a landlord. (Also I need the social when I have a tenant fill out a W-9 to open a deposit account.)

Originally posted by @Frank Adams :

I always took the number and would warn them that any uncollected money for damages or past due rent would be reported to the IRS as "forgiven debt". I'd point out that I wouldn't take the time or trouble to get a WORTHLESS judgement against them. I'd just report the forgiven debt to the IRS, because unlike me the never sleep and they never forget. I always collected all my money from anyone who received that speech.

 I can't believe I've never heard or seen anyone else say this before. Brilliant!

Base on IRS website, if we send forgiven debt to tenant, it will become their income, so I mean they may need to pay tax on it or lost some of the benefit base on their income if they don't plan to have that extra "income" on their tax. 

Originally posted by @Frank Adams :

I always took the number and would warn them that any uncollected money for damages or past due rent would be reported to the IRS as "forgiven debt". I'd point out that I wouldn't take the time or trouble to get a WORTHLESS judgement against them. I'd just report the forgiven debt to the IRS, because unlike me the never sleep and they never forget. I always collected all my money from anyone who received that speech.

Whaaaaaat. Let the Up Votes rain down on this man!

If I may add to the OP's question on whether to collect SS#....

Once I have a good possible applicant, and have met them personally and everything looks good to move forward, I have them do the application on TransUnion SmartMove.  If SmartMove says to accept them, I scroll through the credit report to get a general sense of their income and debts.  If that looks good to me, (and so far I haven't had any bad applicants at this stage), I invite them to rent the unit.  They fill out a lease which doesn't have any personal info, just the agreement, their signature, and their emergency contact.  That's it.  I don't take their SS#, DL#, nothing.  Am I setting myself up for problems?  What personal info do you need from tenants and why?

Originally posted by @Frank Adams :

Joe Splitrock and Nicky Cao. I did send them 1099s which because it looked so official would cause them to cough up !y money.

I learned this idea when I was working s corporate gig at a company that had a highly compensated salesforce. When they signed for their sales gear they were acknowledging that our catalog was valued at $1,000 (1978 dollars) and if they didn't return it, or took it with them to a competitor they would be liable for that amount. Our attorney and CFO hatched that plan and only went to court once to enforce it that I can recall.

Thanks for clarifying that this is not a viable strategy.

What passes for advice these days is incredible.

Rest easy BPers.  Just because you do not obtain a SSN up front doesn't mean you can't get it if needed.  You being a landlord gives you permissible purpose to obtain the tenants SSN at any point during the relationship including collections.  Any good skip tracer can get it in under 5 min and it shouldn't cost you all that much.

@Frank Adams Besides a scare tactic of getting the tenant to sign something they might not completely understand, I do not see the benefit of the forgiven debt.  Id much rather pay the taxes on 24k than the 24k itself.  Since the debt is forgiven you have no recourse to collect or report it as a collectable item for other landlords to see.  Am I missing something?

Tony, I'm not sure where the $24k figure came from, nobody ever got into me for much more than a month's rent. I was never going to waste a minute chasing uncollectible debt.

As I think I said when they received the 1099 they'd contact me to settle.

Originally posted by @Grant Rothenburger :
Originally posted by @Frank Adams:

I always took the number and would warn them that any uncollected money for damages or past due rent would be reported to the IRS as "forgiven debt". I'd point out that I wouldn't take the time or trouble to get a WORTHLESS judgement against them. I'd just report the forgiven debt to the IRS, because unlike me the never sleep and they never forget. I always collected all my money from anyone who received that speech.

 I can't believe I've never heard or seen anyone else say this before. Brilliant!

Which is the brilliant part (a) sending a 1099-C before collection efforts have ended or (b) intimidating the tenant into paying by providing fake paperwork? 

I'll use We Verify System by the Gov. And also I'll ask for copies of everything under the law. Driver License, Social Sec, of all the residents not only the person signing the contract. Dogs, vaccines certificates. Everything of everything that is me. Ask your lawyer in your State. And implement cover your back and your investment FIRST.

If I have tenant's ssn in their file, do I need to black it out when I sell the property and give file to new owner and title company?  Am I required to keep such info confidential, or is it legitimate to give to their new landlord?

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