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IRS letter - EIN number


tymesup

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Two clients of ours have received LTR 1072C from the IRS for the plan year ended 12/31/21. These read similarly:

Thank you for your 5500-EZ. Your correct EIN is xx-xxxxxxx. You should use this number when filing Form 5500-series returns or Form 5558.

If you have questions call or write. Keep a copy of this letter.

Cynthia Crowell, Notices/Unpostables Program Manager

**

Does anything need to be done for the year ended 12/31/21?

Does anything need to be done for the year ended 12/31/22, which has already been filed with the same EIN as for 12/31/21?

Thanks for any help.

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If you already filed, the IRS "should" figure it out and would send the same basic letter again.  

I had a client with the same issue - we had just finished processing his 2022 returns for signature when he got the notification that they'd assigned his new EIN, since his 2021 returns had his SSN listed as the EIN improperly.  For this guy, we prepped amended returns for 2022 to show the new EIN on line 4.  

(Figuring, that won't cause the same IRS letter to pop up a year from now.  I don't know if them getting 2 straight years with the wrong EIN would escalate their correspondence to "cut it out, stop filing with the wrong one.")

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I've seen this a couple of times in the past. First, check the number the IRS says the return should be filed under. Is it applicable to your employer? Then, what number are you using on the 5500-EZ? In my situation, I had filed the EZ using the Trust EIN instead of the company EIN. The correction given by the IRS in my situation was the correct one, so I started using the corporate number on future EZ's. In your case, you could either (amend the 2022 Filing to show the proper number) or to start using the proper number at 12/31/2023.

Hope this helps.

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  • 3 weeks later...

Just to clarify to ensure I have been doing it right, 

I instruct my clients to get an EIN for their plan (I facilitate this).  When an investment account is opened I have instructed the financial advisor to register the account to the plan and use the EIN assigned to the plan.  I tell them to NOT use the business' EIN on the investment accounts.  

Further, when a distribution occurs the plan's EIN is used on the 1099-R, not the business' EIN

Pretty logical.  All good?

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On 11/14/2023 at 11:28 AM, Bri said:

on't know if them getting 2 straight years with the wrong EIN would escalate their correspondence to "cut it out, stop filing with the wrong one.")

I had a client get this as well, and the trigger seems to be that the second return is filed with the incorrect EIN.  

BTW, when I spoke to the IRS regarding this issue, they said the fix was to file NEW returns with the correct EIN (knowing that these are late and that the incorrect 5500 was filed timely).   Since these will be late, you will get love letters from the IRS, and you will need to submit a request for abatement.  It takes a minimum of 30 days from receipt for them to review the abatement, but in most cases it will take longer.  During this time, penalties and interest will continue to accrue and the client will keep getting notices from the IRS.  

Has anyone completed this process successfully?  Or did IRS tell you to correct a different way?  Im just not loving setting yourself up for a penalty when abatement is not guaranteed, and you technically lose the opportunity for DFVCP if abatement is denied.  I cant see a reasonable IRS agent trying to assess a $250,000 maximum penalty for an incorrect EIN, but...

 

 

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