Participant's SSN is Invalid

[Lauren0507]

Our client's plan terminated and all accounts have been distributed except one.  Upon employment, the participant provided an incorrect SSN.  The participant has been unable to provide a valid SSN and is not expected to do so.  Unfortunately, the employer is a small business and failed to obtain I-9 verification.  The account balance is approx. $2500 and is all attributable to employer safe harbor contributions.  He satisfied the eligibility requirements and the funds belong to him, but a distribution cannot be processed using the invalid number, nor can an IRA be established.  I am looking for suggestions on how to handle the remaining funds.

[Peter Gulia]

Many systems for processing a distribution and its tax-reporting and tax withholding function routinely with an entry of, instead of a Social Security Number, an Individual Taxpayer Identification Number. https://www.irs.gov/forms-pubs/about-form-w-7