Is a separate Plan Tax ID number a best practice regardless if assets are held by an investment platform/recorkeeper?

[lisabroc]

From a practical standpoint, it doesn't seem to be necessary to have a separate plan tax ID number when the assets are held with an investment provider/recordkeeper (i.e. John Hancock, American Funds, etc) who uses their own tax payor ID for tax reporting and distribution purposes. That being said, is there a legal precedent for applying for a separate plan tax ID number in this type of situation? We always apply for a separate number with assets in brokerage accounts or other arrangements that need it for tax reporting purposes. Some practitioners take the approach that it is needed to separate employer assets from plan assets in all situations. Not sure how this has been dealt with in the legal arena or how the IRS views this issue. Looking for some further guidance on this topic.

[BG5150]

Who is the trustee?

[Bird]

We do not get a tax id number for plans on those platforms. I don't know if it is best practices or not, but (despite working in this field) I hate doing something that is pointless.

[BG5150]

If the trustee is the record keeper (or a related business thereof) we don't get a separate TIN for the the trust. It usually is at the big outfits.

[GBurns]

Whereas, from an accounting, auditing or IRS or DoL dispute resolution. point of view, it is usually much better to handle when each entity or thing can be identified or segregated under its own indentifying number.

[lisabroc]

Thanks for the comments. Most of our plans are self-trusteed with the owner acting as trustee in most cases. Is it more prudent to apply for a separate trust tax ID number in that situation even if it is never used?

[K2retire]

To further complicate matters, even if you apply for a separate EIN, the IRS will inactivate it after a few years of non use.

[BG5150]

To further complicate matters, even if you apply for a separate EIN, the IRS will inactivate it after a few years of non use.

unfortunately, I haven't seen any rhyme or reason as to when they deactivate them. I seen 4 or 5 years go by and they are gone, but I have had plans with 8, 9, 10 years no activity and the EIN is good as new.