Bank won't accept a check cut from a pension trust account for the par

[alexa]

What do you do if your corporate bank won't accept a check cut from a pension trust accout for 20% withholding tax?

We have a separate EIN for trust and preprinted Form 8109 with trust #

My recollection is that you can use corporate EIN # to remit taxes as an alternative.

Could check be cut to Trustees and deposited in Corporate account and then cut cut from Corproate account to federal depository bank

Can we use a blank Form 8109B to remit taxes?

[Guest Robin Vatalaro]

As you know pension funds are not to revert back to the employer, but in this case you have no choice and I have not seen the IRS have a problem as long as you have a good audit trail and explanation of what happened.

Yes, a blank coupon can be used if properly completed (name, ID#, etc). I have not had any bank reject an 8109 because it was not pre-printed by the IRS.

The check can be cut from corporate general funds. Be aware though that the 1099, 945, and 8109 coupon ID#'s must all match or an IRS notice will be generated. In other words if the 8109 have the corporate EIN# but the 1099 and 945 have the trust EIN, the IRS won't be able to match up the various filings and will send a notice.

[Guest b2kates]

How large is the amount?

Why not establish EFT deposit for plan.

Strongly believe that still inappropriate to issue corporate check for tax liability.

Maybe you should explore using a different depositary bank.

IT is not clear why the bank will not accept pension check for deposit liability.

[pmacduff]

My guess is that the bank won't take the check because of the way it was made payable...

If you have a separate Trust ID # and corresponding 8109 coupons, you definately don't want to deposit under the Corporate ID#. As Robin mentioned, that's an accident waiting to happen when the government goes to reconcile. I have a client that is still trying to straighten out a pension withholding deposit issue (where #'s were different) that occurred back in 2000...and the kicker is that the withholding amount was approximately $420! Wasting a lot of everyone's time. My two cents says that you should try and have the investment firm recut the check...possibly payable to "The Trustees" of the plan andyour Corporate bank? Or ask the bank how they want the check payable? Best of luck...maybe you can tell us how you end up....

[Mike Preston]

Mail it to St. Louis?

[alexa]

Mike, would you please elaborate? I vaguely remember that option.

pmamcduff- In reference to your question on check- it is made payable to the Trustee of the Plan, that's the problem , the fund won't cut a check made payable to the depository only to Trustee of plan

So the Trustee check then needs to be deposited and a check cut

If plan sponsor doesn't have a plan checking account the check to the federal depository needs to be cut from somewhere, hence the idea of deposting to Corporate account and remitting withholding check from Corporate account

The Plan does have a separate trust EIN and preprinted coupon book but as long as we report employer's EIN on all forms, i.e. blank 8109B, Form 945 and Form 1099's we shouldn't have the problem you mention. Of course we would not use the preprinted trust coupon Form 8109 if we went this route.

Although an issue came up in my further thought process that if the employer is required to remit withholdign taxes electronically, I would think if they file dpension wihtholding under their EIN that transaction woudl need to be done electronically as well or penalties

Any others ' thoughts on this?

[Mike Preston]

Mail the check made payable to the US Treasury, along with an 8109 (or 8109-B properly filled out) to:

FINANCIAL AGENT

FTD PROCESSING

P.O. BOX 970030

ST. LOUIS, MO 63197

This address was current when I last used it. You should look up the instructions to the 8109 to ensure it is still the correct address. The phone number I used at the time to ensure the address was correct is: 1-888-568-7343.

I am amazed that financial institutions are incapable of making checks payable to the US Treasury. They may need special authorization from the Trustee, but to not allow it at all seems very strange.

But, as you mention, if all else fails, set up a bank account in the name of the plan. I seem to run into at least one plan sponsor a year that resists this. Once they try it, they really like it. They find all sorts of uses for the checking account, like avoidance of DOL penalties if the payroll system has a hiccup, for instance.

I am particularly unsympathetic to a plan that would have EFT requirements. If they are distributing that much where withholding rises to the level that requires electronic filing, how can they not have the ability to pay taxes automatically? BTW, what are the thresholds on this, as it has been a while since I looked it up for a qualified plan?

[alexa]

Thanks Mike

I had thought that the federal reserve banks were no longer accepting deposits

Is St Louis an exception?

[alexa]

Mike,

BTW,Circular E says to make check payable to Financial Agent not US Treasury

I thought hearing somewhere that federal reserve banks were no longer acting as federal depositories accepting deposits?

The threshold is 200K during prior year

If you are filing under employer EIN, you need to add payroll taxes to pension withholdings to determine 200K

[Mike Preston]

Yes, the current version of Circular E does indeed say to make the check payable to Financial Agent. Only the Treasury could come up with something so nebulous. Really makes our clients feel good about sending a check, doesn't it? "Financial Agent - US Treasury" would have been so easy, wouldn't it? Sheesh.

[Belgarath]

We had an "authorized depositary" that wouldn't accept a check drawn on any other institution, (and they have this right) but they would accept a money order. Just something you might try another time.

[Guest stryan]

As I understand it, federal depositories are required to transmit to the Feds withholding and tax deposits the same day (or within 24 hours or some such time frame). Since it may take several days for a brokerage account check to clear, this would leave the bank on the wrong side of the "float". Consequently, they require immediate access to the funds which, in must cases, is the reason they prefer the deposit be made on the corporate checking account at their bank.

I have found that depositing to St Louis or using electronic deposit to be the easiest and most expeidiant for most clients.

[Lynn Campbell]

When you send a deposit to St. Louis, do you get any acknowledgement or receipt in return? Can the check you send be issued by any institution (bank, brokerage company, etc.) ? I have never tried this method...

[Mike Preston]

No receipt that I am aware of. Cancelled check is the receipt.

They appear to accept any kind of check, I think.

[bzorc]

As of May 20, 2004, the St. Louis address is still correct per the 1-888-568-7343 phone number listed in Mike Preston's posting. Checks should be made out to "Financial Agent".

[Blinky the 3-eyed Fish]

I liked it when you wore that stork dress.