Unfortunately, the government wants their money. :) The way that the IRS tracks whether you're reporting your rent income is by comparing your tax return to the 1099 that we send them. So they require us to submit a 1099 for every owner we represent. We have to send these out every January before the end of the month. If we don't have a social security number on file for you, the IRS requires us to withhold 28% of the money we collect from your tenant so that they can get their taxes from it. Obviously, very few people pay an effective tax rate as high as 28%, so you don't want this to happen to you. We also don't want to keep track of backup withholdings, so we won't represent an owner if they won't provide a valid social security number or tax ID number.
Rest assured that your social security number is kept only on our secure cloud server, and only our staff have access to it.