Tax Withholding on Distributions

[TPA Bob]

We provide tpa services for a number of plans that have individual brokerage accounts. When we process a taxable distribution we have withholding that needs to be paid into the federal government. We have had issues with the trust federal tax id being disallowed after a couple of years of non-use. We are considering having the deposit made using the Plan Sponsor's tax id and filing Form 945 and 1099-R using same. Anyone have a concern doing this?

[Guest Tom:]

The instructions for Form 1099-R provide that the the payer, trustee, or plan administrator must file Form 1099-R using the same name and employer identification number (EIN) used to deposit any tax withheld and to file Form 945, Annual Return of Withheld Federal Income Tax. Note that the IRS may assess a penlty of up to $50 for an incorrectly completed 1099-R. See page 7 of the intructions at the following link: http://www.irs.gov/pub/irs-pdf/i1099r.pdf

[Guest Sieve]

And, for what its' worth, the Plan Administrator normally (as per the doucment) is the employer.

[austin3515]

My advice, PenChecks!!!