                        T.C. Memo. 2000-210



                      UNITED STATES TAX COURT



        SHERALD LYNN AND SUSAN JANA DAVIS, Petitioners v.
           COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 12859-98.                       Filed July 10, 2000.



     Sherald Lynn Davis, pro se.

     Portia Rose, for respondent.



                        MEMORANDUM OPINION

     WOLFE, Special Trial Judge:    Respondent determined a

deficiency in petitioners’ Federal income tax of $3,060 for the

taxable year 1996.   Unless otherwise indicated, section

references are to the Internal Revenue Code in effect for the

year in issue, and all Rule references are to the Tax Court Rules

of Practice and Procedure.
                               - 2 -

     The issues for decision are:   (1) Whether requiring

petitioners to provide Social Security numbers for their children

as a condition to allowing them dependency exemptions for their

children violates the Religious Freedom Restoration Act of 1993;

(2) whether requiring petitioners to provide Social Security

numbers for their children as a condition to allowing them

dependency exemptions for their children violates the Privacy Act

of 1974.

     The facts have been fully stipulated under Rule 122 and are

so found.   Petitioners resided in Liberty County, Texas, when the

petition in this case was filed.

     Petitioners claimed dependency exemptions for their eight

children on their 1996 Federal income tax return.   However,

petitioners failed to provide the children’s Social Security

numbers on this tax return.   At respondent’s request, petitioners

provided the children’s birth certificates, immunization charts,

and medical identification cards.

     Respondent concedes that petitioners have met all the

statutory requirements for claiming dependency exemptions for

their children for 1996, except for the requirement that

petitioners include their children’s Social Security numbers on

their return.   Accordingly, pursuant to section 151(e) respondent

disallowed petitioners’ claimed dependency exemptions for the

children.
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     Petitioners assert that they are not opposed to the system

of Social Security insurance, but that they are religiously

opposed to the issuance of Social Security numbers for their

dependent children.   Respondent does not dispute that petitioners

hold this belief.   Petitioners further assert that requiring them

to use Social Security numbers to receive tax benefits is a

violation of the Religious Freedom Restoration Act of 1993

(RFRA), Pub. L. 103-141, sec. 2, 107 Stat. 1488, 42 U.S.C. secs.

2000bb to 2000bb-4 (1994), and the Privacy Act of 1974 (Privacy

Act), Pub. L. 93-579, sec. 7, 88 Stat. 1900, 5 U.S.C. sec. 552a &

note (1994).

     Section 151(a) provides that in the case of an individual, a

deduction shall be allowed for each exemption allowed under

section 151.   However, section 151(e) provides:   “No exemption

shall be allowed under this section with respect to any

individual unless the taxpayer identification number of such

individual is included on the return claiming the exemption.”1




1
     Sec. 151(e) was added to the Code by the Small Business Job
Protection Act of 1996 (SBJA), Pub. L. 104-188, sec. 1615(a)(1),
110 Stat. 1853. Sec. 151(e) is generally effective for returns
due after Sept. 19, 1996. However, for dependents claimed for
the 1996 taxable year, SBJA requires taxpayer identification
numbers for any children born on or before Nov. 30, 1996. See
SBJA sec. 1615(d)(2), 110 Stat. 1853.
                               - 4 -

     Section 7701(a)(41) defines the term “taxpayer

identification number” (TIN) to mean “the identifying number

assigned to a person under section 6109.”   Section 6109(d)

specifies that the Social Security account number (SSN) issued to

an individual is the identifying number of such individual,

except as otherwise specified under applicable regulations.    See

sec. 6109(d).   The regulations provide that an individual

required to furnish a TIN must use an SSN, unless such individual

is not eligible to obtain an SSN.   See sec. 301.6109-

1(a)(1)(ii)(A) and (B), Proced. & Admin. Regs.   The regulations

further provide that “any individual who is duly assigned a

Social Security number or who is entitled to a Social Security

number will not be issued an IRS individual taxpayer

identification number.”   Sec. 301.6109-1(d)(4), Proced. & Admin.

Regs.2

     SSN’s are issued by the Social Security Administration (SSA)

of the U.S. Department of Health and Human Services upon the

application by a citizen, by a qualified alien, or by a parent on

behalf of a qualified child.   See generally 20 C.F.R. secs.


2
     Sec. 301.6109-1(d)(4) Proced. & Admin. Regs., was added to
the regulations by T.D. 8671, 1996-1 C.B. 314, and is effective
for any return, statement, or other document required to be filed
after Dec. 31, 1995. Prior to the promulgation of this
regulation, respondent had issued individual taxpayer
identification numbers to taxpayers who claimed religious
objections to the use of Social Security numbers. See Wolfrum v.
Commissioner, T.C. Memo. 1991-370, affd. 972 F.2d 350 (6th Cir.
1992).
                                - 5 -

422.101 to 422.112 (2000).    The issuance of an SSN results in the

creation of (1) a record at the SSA of that person’s earnings for

purposes of determining the old-age, survivors, and disability

insurance and other benefits that the person may be entitled to,

and (2) a unique numerical identifier for the individual for use

by a variety of governmental and private entities.   See Miller v.

Commissioner, 114 T.C. ___ (2000); Komuves, “We’ve Got Your

Number:   An Overview of Legislation and Decisions to Control the

Use of Social Security Numbers as Personal Identifiers”, 16 J.

Marshall J. Computer & Info. L. 529 (Spring 1998).

The Religious Freedom Restoration Act of 1993

     RFRA was enacted in response to Employment Div. v. Smith,

494 U.S. 872 (1990).   In Smith, the Supreme Court held that valid

neutral laws of general applicability do not violate a person’s

religious rights even when the law is not supported by a

compelling governmental interest.   See id.; Adams v.

Commissioner, 110 T.C. 137, 138 (1998), affd. 170 F.3d 173 (3d

Cir. 1999).   Prior to Smith, the Government had to demonstrate

that the application of such laws to religious practices was

“essential to accomplish an overriding governmental interest” or

represented “the least restrictive means of achieving some

compelling state interest.”    Employment Div. v. Smith, supra at

899 (O’Connor, J., concurring in judgment); see also Adams v.

Commissioner, supra at 138.
                               - 6 -

     RFRA restores the compelling interest test, which was used

prior to Smith, by prohibiting the Government from imposing a

substantial burden on the free exercise of religion unless it

demonstrates that application of the burden is the least

restrictive means of achieving a compelling governmental

interest.   See RFRA sec. 2, 107 Stat. 1896, 42 U.S.C. sec.

2000bb-1(b)(1994); Adams v. Commissioner, supra.   In evaluating

whether the Government has met the compelling interest test,

cases decided prior to Smith are applicable, and the test “should

not be construed more stringently or more leniently than it was

prior to Smith.”   Adams v. Commissioner, supra at 139.    In City

of Boerne v. Flores, 521 U.S. 507 (1997), the Supreme Court held

that RFRA was unconstitutional as applied to State and local

laws.   The parties do not contend, nor do we decide, that RFRA is

invalid as applied to Federal law.

     In this case, petitioners do not dispute that respondent’s

interests in preventing fraud and abuse and administering the tax

system properly are compelling governmental interests.    See,

e.g., Hernandez v. Commissioner, 490 U.S. 680, 699-700 (1989)

(“[E]ven a substantial burden would be justified by the ‘broad

public interest in maintaining a sound tax system,’ free of

‘myriad exceptions flowing from a wide variety of religious

beliefs.’” (quoting United States v. Lee, 455 U.S. 252, 260

(1982))); Miller v. Commissioner, 114 T.C. ___ (2000) (The
                                 - 7 -

Government has a compelling interest in effectively tracking

claimed dependency exemptions.).    Instead, petitioners contend

that requiring them to use SSN’s for their children is not the

least restrictive means of meeting the Government’s compelling

interests.   Petitioners further contend that issuing their

children IRS individual taxpayer identification numbers (ITIN) is

a less restrictive means of meeting respondent’s compelling

interest than requiring SSN’s.

     Petitioners’ argument is substantially the same as the

argument recently raised in Miller v. Commissioner, supra.     In

Miller, the taxpayers believed that SSN’s are universal numerical

identifiers that were equated with the “mark of the Beast” warned

against in the Bible at Revelation 13:16-17.    In that case, the

taxpayers’ religious objections extended only to unique numerical

identifiers and not to numbers issued for discrete purposes.

Accordingly, the taxpayers offered to obtain ITIN’s for their

children and provide the ITIN’s on their return.    In Miller, we

rejected this argument.   In so doing, we found that issuing

ITIN’s to such individuals, who were otherwise eligible to

receive an SSN, would be less effective in detecting fraud than

requiring the use of SSN’s.

     SSN’s are unique numerical identifiers that are used to

ferret out fraudulent applications through the use of computer
                               - 8 -

matching techniques.   See Bowen v. Roy, 476 U.S. 693, 710 (1986).

Through cross-matching of SSN’s, respondent can detect erroneous

or fraudulent claims by identifying whether an SSN has been

claimed on another return for the year.   See Miller v.

Commissioner, supra at ___ (slip op. at 9-10).   Congress

acknowledged this benefit in 1994, when it eliminated an

exception to the TIN requirement.   See sec. 6109 as amended by

Uruguay Round Agreements, Pub. L. 103-465, sec. 742, 108 Stat.

5010 (1994).   The House report discussing this section states:

      The requirement that TIN’s be provided with respect
      to each dependent claimed on a tax return has signi-
      ficantly reduced the improper claiming of dependents.
      Requiring that TIN’s be supplied regardless of the age
      of the dependent will further reduce the improper
      claiming of dependents. [H. Rept. 103-826, 196
      (discussing section 742(b) of the Uruguay Round
      Agreements Act, Pub. L. 103-465, 108 Stat. 4809, 5010
      (1994)).]

      Issuing an ITIN to an individual who is otherwise eligible

to receive an SSN creates the risk that the individual could

subsequently obtain an SSN.   See Miller v. Commissioner, supra at

___ (slip op. at 12-13).   In such cases, the individual would

have two TIN’s, each purporting to be a unique identifier.     See

id.   If an individual were to have two TIN’s, respondent’s cross-

matching program would be less effective in revealing duplicate

claims than if the individual had only one identifying number.

See Miller v. Commissioner, supra; U.S. General Accounting

Office, Tax Administration Could Do More to Verify Taxpayer
                               - 9 -

Identities (Pub. No. GAO/GCD 95-148) (Aug. 30, 1995) (describing

the difficulty in tracking individuals without correct TIN’s in

the IRS computer system).   For example, respondent’s computer

programs would not be able to detect easily whether divorced

parents are both trying to claim their children as dependents.

See Miller v. Commissioner, 114 T.C. at ___ (slip op. at 10).

Under these circumstances, the Government does not have an

obligation to tolerate the risk of individuals’ fraudulently

obtaining benefits.

     We find that requiring petitioners to use SSN’s to claim

dependency exemptions for their children is the least restrictive

means of furthering the compelling governmental interest of

preventing fraud.   Accordingly, we hold that the required use of

SSN’s is not a violation of RFRA.

Privacy Act of 1974

     The Privacy Act makes it unlawful for any “government agency

to deny to any individual any right, benefit or privilege * * *

because of such individual’s refusal to disclose his social

security account number.”   Privacy Act sec. 7(a)(1), 5 U.S.C.

sec. 552a (1994).   However, section 7(a)(1) of the Privacy Act is

not applicable to “any disclosure which is required by Federal

statute.”   Privacy Act sec. 7(a)(2)(A).   Section 151(e) is a

Federal statute that requires the disclosure of a dependent’s
                              - 10 -

Social Security number.   Accordingly, petitioners’ rights under

section 7 of the Privacy Act are not violated by section 151(e).

     To reflect the foregoing,

                                      Decision will be entered

                                 for respondent.
