Tax Identification Number - Plan

[401kWhisperer]

Hi, 

I reread a few prior discussions on this and it seems to be the consensus is that if the plan's assets are with a recordkeeper (Vanguard/Ascensus for example), no TIN is needed because they are the payer on the 1099-R.  I just wanted to confirm I'm not missing something and perhaps there's another logical reason in getting one.  I am at a new firm and they generally request them for all plans.  I believe my last employer only applied if the assets were with a brokerage account.  

 

thanks!

 

[Peter Gulia]

When the retirement plan’s named fiduciary expects that all distributions will be tax-reported by the plan’s trustee or its agent (and that the plan will have no asset other than those held by a bank or trust company as the plan’s trustee or custodian), different lawyers, accountants, and other advisers give different advice about the wisdom or unwisdom of applying for a taxpayer identification number.

Different service providers have different business practices about this.

Consider falling in with your new employer’s practice, perhaps for no more reason than it is your employer’s practice.

Or, to learn more about your new firm’s reasoning, ask.

[AlbanyConsultant]

FWIW, I've taken over plans from several TPAs who routinely get TINs for all plans "because that's what we've always done".

My take is that this was more prevalent 15+ years ago but now it isn't even really necessary for brokerage account plan - I've had several of them audited and there have been no problems with the agents separating plan accounts from business (or personal) accounts.

That being said, @Peter Gulia is right - I'd ask why, but it's not really a big deal because they're so easy to get.

The hill I will metaphorically die on is having sole props get an EIN before I install a one-person plan.  So many accountants push back on that.