EIN for retirement trust/Federal Withholding

[Guest Becky Ray]

I have a new client who has always reported distributions and withholding under the employer's EIN.

I advised her that she needs to apply for an EIN for the retirement trust and report distributions and withholding under that number. She makes distributions through the plan checking account and wants to deposit the withholding in the company account and use the IRS Electronic Federal Tax Payment System (EFTPS) to deposit the withholding under the company number.

Plan counsel has since advised her that 90% of retirement plans don't have separate EINs for the trust and it is fine to report distributions and withholding under the employer's EIN. I disagree with this, but thought somebody out there might know if there is ever a situation when this would be acceptable.

Also, does anyone have experience with the EFTPS? How difficult is it to set up. This is a small plan and electronic filing is not required.

[KJohnson]

Search the message board, this topic has been discussed in detail before.

[imchipbrown]

Most of our plans also use the Employer ID. The important issue in my mind is to make sure the deposit is coded as a 945 deposit.

[bzorc]

I believe, though, that what Chip does may be frowned upon by the IRS. I know I have been on a campaign to get all of the qualified plans that I work on (including one-man plans) a Trust EIN. Makes things much simpler, as the IRS, when trying to reconcile payroll and retirement plan distribution withholding, can really cause trouble for a company if these numbers do not tie out.