Trust ID Number with "P" suffix

[David MacLennan]

Pension plan is making a distribution, the first in approx 10 years. The client and I contacted the IRS to verify the trust tax ID number. The number the client thought was the pension trust tax ID number turned out to be a old number for the C-Corp (they changed to S-Corp status 10 years ago).

The IRS ee told us to use the current employer ID number with a "P" appended to the end, and she indicated that such a number is in the IRS database. It appears the IRS at one point issued these numbers with "P" appended to the end of the employer ID number. Or perhaps they never really issued the numbers and it was just a convention for dealing with the often mistakenly blurred separation between the plan and the employer.

Is anyone aware of any problems using such a tax ID number, eg, 10 characters rather than 9, or other issues?

I will need to file 8109, 945, 1096, 1099, etc. It seems to be an outmoded practice since new trust tax ID numbers are not handled that way.

[Lori Friedman]

Years ago, I worked with some very elderly women who didn't have their own Social Security numbers. Each woman simply used her husband's SSN, with a letter of the alphabet added to the 9-digit number (I think it might have been "A" or "D"). These ladies had never held paying jobs, and there was no need for them to obtain SSNs.

What does this story have to do with your situation? Probably nothing. But, this approach to an ID number is very similar to and consistent with the instructions that you've been given.

[Earl]

http://www.irs.gov/businesses/small/articl...=102765,00.html

I would get a new number. See "apply online now" way at the bottom.

[WDIK]

If you are generating the forms using a software program, I think it is likely that you may not be able to enter a 10-digit ID number. At least that is the case with the software we use. Even the IRS 945 fill-in form is set up to enter a 9-digit ID number, although I suppose you could eliminate the hyphen and add a "P" at the end.

As Earl pointed out, it is very easy to apply for a new number. This may be the best course of action.

[Guest b2kates]

I agree with Earl, get a new ID number. Only takes minutes by telephone.

I recall iin the Past that the IRS issued trust ID numbers for pension plans with the P designator; but have not seen that in years.

[Lori Friedman]

The letter designations must have been something that the IRS and Social Security Administration did years ago, long before the days of form preparation software and computer scanning.

Yes, I'm old enough to have prepared tax returns by hand...

[David MacLennan]

Thanks for all the replies.

I came to know about Ann 84-40 in my research on this issue, which blesses the use of the employer EIN for the tax forms connected with plan distributions. Before, I had always thought use of the employer EIN was "wrong" and the use of the Trust EIN was "right."

Also, the 2003 Form 5500 Sch R and Sch P instructions seem to bless the use of the Employer EIN on distribution related forms (I don't recall seeing that language on earlier forms, but perhaps it has always been there).

Still, I will get a Trust EIN as it seems more proper. I don't think use of the "P" suffix is worth the risk of the possible headache later if the forms are rejected or cannot be generated by today's software. It also seems to be a practice the IRS has abandoned.

[Earl]

You can use the employer EIN but the tax deposit method (i.e. wire payment vs. mail in a check) attaches to the number.

You are begging for a huge issue if you try to add a pension tax deposit to an employer tax deposit.

[David MacLennan]

Earl, could you go into greater detail? Is it a problem because the IRS will continue to expect future deposits? Or, is it difficult to make the paperwork consistent so the IRS doesn't send multiple letters notifying you something is off?