Trust Identification Number

[Brian Gallagher]

Can someone point me to the place in the regs where it says that each trust should have it's own Trust Identification Number (that gets entered on the Schedule P)?

Any help is appreciated.

[pmacduff]

I don't think anyone can point you to a Reg because there isn't one - I think most TPAs recommend and most employers/sponsors file for a Trust ID # to keep things separate from the Corporate info. I personally favor a client/sponsor using only one ID number (the Corporation) because that way you don't end up with the plan tax withholding deposits under one number, the 1099-R forms under one number and the #945 under another number. My clients have done this and made the January deadlines and reconciliation a hassle because the government cannot reconcile. I guess it's a matter of preference, but to my knowledge, a separate tax ID for the Trust is not required. Hope this helps.

[Medusa]

Here is an earlier thread on this topic:

http://benefitslink.com/boards/index.php?showtopic=4585

[RTK]

My perspective (from someone who does not have to complete any forms) is that the trust is a separate legal entity payor and taxpayer that should have its own identification number for distributions and transactions. It seems clear to me that plan assets held in trust should not be identified as those of the employer in a transaction.

[Kirk Maldonado]

I think that the plan needs its own ID number because otherwise the payments are attributed to the employer. That could cause problems with the employment tax withholdings, especially relating to the taxable wage base.

[pmacduff]

As long as the 1099-R payments reconcile to the 945 form and the submissions - why would there be confusion? I'm not a payroll person but I thought that the W-2 forms were reconciled to the 941 form - all filed separately?

[2muchstress]

For what its worth, the IRS audited a plan of mine last year. It was my only plan that did not use a separate EIN for the trust (takeover).

The IRS didn't mention anything about it, and the audit was completed with no changes.

This same plan however was using the EMployers ID # on distributions, and I remember that there was a difficult time because tax deposits from the plan were being credited to the corporation. Fortunately we have a separate department that handles all the distributions from our plans, so I did not have to deal with that recon.

[KJohnson]

This is from the IRS Q&A's at the 1999 ASPA conference

73. Q. Would you confirm that retirement plan trusts should/must obtain and use a separate EIN (or Trust Tax Number) for reporting distributions, rather than using the employer's EIN?

A. Retirement trusts are required to have their own separate EIN, especially for purposes of holding assets. Distributions can be reported under the EIN of the plan sponsor in accordance with published rulings, but that does not eliminate the need of the trust to have its own EIN

[pmacduff]

Thanks KJohnson for that info....that brings up some questions for me...I've been in the Retirement Plan Administration field for 12 years (Pure Admin - no investments). In all of those years, filling out the Schedule P and the like for the Plans I handled, I have very rarely had clients with and/or reported a separate Trust ID #. Never any issue from the IRS. In those 12 years at my current and prior Administrative firms, I would say I have witnessed at least 25+ IRS/DOL audits of the plans I did, and this NEVER came up. I'm not trying to be naive here, I just want to know if this is something many administrators/consultants may be missing. How truly "required" is a Trust ID, what are the consequences of not having a separate number and how would the IRS discover there was not a separate number, other than an audit and perhaps reviewing their own required form filings (Schedule P of form 5500)? I know it is not that difficult, I'm just wondering how important other TPAs feel this is and how many are assuring themselves that the client's have a Trust ID....????

[Tom Poje]

One possible exception to the ER getting a separate Trust EIN would be to use the trust EIN of the place where the assets are held- e.g. Manulife, Lincoln, etc.

reminds me of a song I wrote a few years ago, that came about because we needed to get EIN numbers. I shared it before, but in case you missed it:

Old Macdonald

Old Macdonald had a plan

He needs an E-I-N

And in this plan he has match

E-I E-I-N

There’s a deferral here a deferral there

Here a match, there a match

Everywhere a match match

Old Macdonald had a plan

E-I E-I-N

Old Macdonald ran a scam

I-O I-O-U

And in this scam he stole the dough

I-O I-O-U

Steal a few bucks here steal a few bucks there

Here a buck, there a buck

Everywhere a buck buck

Old Macdonald ran a scam

I-O I-O-U

Old MacDonald is in jail

D-O D-O-L

He hasn’t got a chance of bail

D-O D-O-L

Steal a few bucks here serve a little time there

Here a year there a year

The judge gave him about 20 years

Old MacDonald is in jail

D-O D-O-L

Old MacDonald’s on parole

And living in RIO

He has a big fat Swiss Account

RIO – R-I-O

With a pretty girl here and a pretty girl there

Here a grand there a grand

He’s got about 500 grand

Old MacDonald’s on parole

And living in RIO

Old MacDonald should be alarmed

E-I E-I-O

His former help will do him harm

E-I E-I-O

There’ a gunshot here and a gunshot there

Here a shot there a shot

Everywhere a gunshot

Old MacDonald bought the farm

E-I E-I-O

[pmacduff]

Tom - Are you by any chance "prepping" for ASPA you sly dog?

[maverick]

Another hassle w/separate trust numbers is when the IRS "deactivates" a TIN due to inactivity. You make a distribution under the TIN, report it on a 945 in January, then 3 months later you get an IRS letter assessing penalties and interest because the IRS posted the withholding to the employer's regular tax ID #.

Maverick

[Tom Poje]

pmacduff:

that should probably be 'shy' dog.

I will be at the ASPA conference, but not doing anything special.

Too bad. I 'discovered' a couple of 'lost' Beatle pension songs. oh well.

Actually, the boss is running a booth this year, so I will be there part of the time.

[pmacduff]

Hey - thought everyone might find this interesting (from the 2001 Schedule P instructions):

General Instructions

Trust's Employer Identification Number

Enter the trust employer identification number (EIN) assigned to the employee benefit trust or custodial account, if one has been issued to you. The trust EIN should be used for transactions conducted for the trust. If you do not have a trust EIN, enter the EIN you would use on Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc., to report distributions from employee benefit plans and on Form 945, Annual Return of Withheld Federal Income Tax, to report withheld amounts of income tax from those payments.

Note. Trustees who do not have an EIN may apply for one on Form SS-4, Application for Employer Identification Number. You must be consistent and use the same EIN for all trust reporting purposes.

No where here does it say that a number is required.......................?!?!?!?