The following opinion is presented on-line for informational use only and does not replace the official version. (Mich Dept of Attorney General Web Site - www.ag.state.mi.us)



STATE OF MICHIGAN

FRANK J. KELLEY, ATTORNEY GENERAL


Opinion No. 6814

August 19, 1994

SOCIAL SECURITY NUMBERS:

Requirement that persons seeking homestead property tax exemptions include their social security numbers on their applications

HOMESTEAD PROPERTY TAX EXEMPTIONS:

Requirement that persons seeking homestead property tax exemptions include their social security numbers on their applications

The Michigan Legislature has not prohibited the Michigan Department of Treasury from requiring that applicants for homestead property tax exemptions list their social security numbers on their applications.

By statute, Congress has authorized the use of social security account numbers by the Michigan Department of Treasury and local units government in their administration of the homestead property tax exemptions.

By statute, Congress has required that these social security numbers must be kept confidential and may not be disclosed to any other persons than those associated with administration of the homestead property tax exemptions.

Honorable Michael J. Bouchard

State Senator

The Capitol

Lansing, Michigan

Honorable Philip E. Hoffman

State Senator

The Capitol

Lansing, Michigan

Honorable Michael J. O'Brien

State Senator

The Capitol

Lansing, Michigan

Each of you has asked about the requirement that persons seeking a homestead property tax exemption include their social security numbers on their applications. Your inquiry raises two questions: the authority of the Department of Treasuiry to require that this information be included and the impact of federal law on this requirement.

In section 4(6)-(9) of 1993 PA 331, MCL 211.904 4(6)-(9); MSA 7.557(34) 4(6)-(9), the Legislature has provided that persons claiming this exemption must file affidavits on a form prescribed by the Michigan Department of Treasury. The form of affidavit prescribed by the Michigan Department of Treasury requires that applicants list their social security numbers. The Legislature may, if it chooses, amend section 4 of 1993 PA 331 to prohibit the Michigan Department of Treasury from requiring that applicants provide their social security numbers.

Under federal law, the use and disclosure of social security numbers by the Department of Treasury or local units of government is governed by 42 USC 405(c)(2)(C)(i) and (vii) of the Social Security Act. 42 USC 405(c)(2)(C)(i) provides:

It is the policy of the United States that any State (or political subdivision thereof) may, in the administration of any tax, general public assistance, driver's license, or motor vehicle registration law within its jurisdiction, utilize the social security account numbers issued by the Secretary for the purpose of establishing the identification of individuals affected by such law, and may require any individual who is or appears to be so affected to furnish to such State (or political subdivision thereof) or any agency thereof having administrative responsibility for the law involved, the social security account number (or numbers, if he has more than one such number) issued to him by the Secretary. [Emphasis added.]

Clearly, by this language the Congress has authorized the use of social security account numbers by the Department of Treasury and local units of government in their administration of the homestead property tax exemption. The section quoted above, however, limits the use of that number to administering tax laws.

In 42 USC 405(c)(2)(C)(vii) the Congress has prohibited the disclosure of social security numbers that are obtained or maintained pursuant to any law enacted on or after October 1, 1990:

(vii) (I) Social security account numbers and related records that are obtained or maintained by authorized persons pursuant to any provision of law, enacted on or after October 1, 1990, shall be confidential, and no authorized person shall disclose any such social security account number or related record.

(II) Paragraphs (1), (2), and (3) of section 7213(a) of Title 26 [26 USC 7213(a)] shall apply with respect to the unauthorized willful disclosure to any person of social security account numbers and related records obtained or maintained by an authorized person pursuant to a provision of law enacted on or after October 1, 1990, in the same manner and to the same extent as such paragraphs as such paragraphs apply with respect to unauthorized disclosures of returns and return information described in such paragraphs. Paragraph (4) of such 7213(a) of Title 26 [26 USC 7213(a)(4)] shall apply with respect to the willful offer of any item of material value in exchange for any such social security account number or related record in the same manner and to the same extent as such paragraph applies with respect to offers (in exchange for any return or return information) described in such paragraph.

(III) For purposes of this clause, the term "authorized person" means an officer or employee of the United States, an officer or employee of any State, political subdivision of a State, or agency of a State or political subdivision of a State, and any other person (or officer or employee thereof), who has or had access to social security account numbers or related records pursuant to any provision of law enacted on or after October 1, 1990. For purposes of this subclause, the term "officer or employee" includes a former officer or employee.

(IV) For purposes of this clause, the term "related record" means any record, list, or compilation that indicates, directly or indirectly, the identity of any individual with respect to whom a social security account number is maintained pursuant to this clause. [Emphasis added.]

Thus, social security numbers that are provided to the Department of Treasury (and, of course, to assessors of the tax collecting units who initially collect the affidavits and forward them to the Department of Treasury) must be kept confidential and may not be disclosed to any other persons than those associated with administration of the homestead tax exemption. The willful, unauthorized disclosure of social security numbers in violation of 42 USC 405(c)(2)(C)(vii)(I) constitutes a felony subject to penalties set forth in 42 USC 405(c)(2)(C)(vii)(II). These penalties, the same as those delineated in 26 USC 7213(a) of the Internal Revenue Code for the unauthorized disclosure of tax return information, include imprisonment for up to five years and/or a fine of up to $5,000.

Therefore, the Department of Treasury, through local assessors, may collect social security numbers for identification purposes in its administration of the homestead property tax exemption. Disclosure of the social security account numbers is forbidden as stated above.

The State Tax Commission, by letter of February 4, 1994, promptly advised all assessors and equalization directors of the prohibition on disclosure of the social security numbers that appear on the homestead property tax affidavits. That letter, among other things, recommends to each of those local officials the following procedures:

1. Discuss this issue with your township or city legal adviser or corporate counsel.

2. Do not use the Social Security number supplied on the affidavit for any other purpose than administering the homestead property tax exemption.

3. Store the completed affidavits in a secure area not accessible to the public.

4. Make the Social Security number unreadable before making a copy of it to be given to anyone not administering the property tax exemption.

5. Local property tax officials should store completed affidavits, or copies of completed affidavits, with the same kind of security measures that apply to the storage of real or personal property statements.

Frank J. Kelley

Attorney General