Can an individual without an EIN set up a plan?

CPA has come to us at the last minute (of course) with a self-employed consultant who wants to set up a plan.  CPA is telling me that he does not have a business, he is being paid directly and to set up the plan under his SSNO.  I told her we would not set up the plan with a SSNO.  Now CPA is asking me does he have to create an LLC just to sponsor a plan?  Any suggestions?  Thanks!!

You can apply for an EIN as a sole-proprietor and list the reason as "started retirement plan"

But not until after the new year because the IRS has the site down for maintenance until 1/2/2019.  It was supposed to go down about 40 minutes ago.  Haven't checked that it actually did.

But one is not needed to set up a plan.

Thanks Lou.  It looks like if one applies for an EIN as a sole proprietor, the reasons are only:

• started a new business
• Hired an employee
• banking purposes
• changed type of organization
• purchased a business.

I don't see anything for "started a plan".

Thanks.

Thanks Mike .  The IRS site is still up as of now at least :)

I have to put something in for the "EIN" in my document system before I can even create a document.  And I don't want to put a bogus number in there or the SSNO...so from that standpoint it seems like I MUST have an EIN to set up a plan.

I'd assume you could use "banking purposes" amd as Mike points out you should be able set up the plan without receiving an EIN.

We typically put "Applied For" in the EIN field if it is asked for.

Also you "probably" won't need the EIN until you have to file the 5500 when assets exceed $250K.

Thanks!  I am telling the CPA to go online with the IRS and create an EIN for the sole proprietorship for "banking purposes."

1 hour ago, AKconsult said:

Thanks Lou.  It looks like if one applies for an EIN as a sole proprietor, the reasons are only:

• started a new business
• Hired an employee
• banking purposes
• changed type of organization
• purchased a business.

I don't see anything for "started a plan".

Thanks.

 

You are looking for the EIN for the sole prop, which you need before you apply for an EIN for the plan.  There is an "other" option in section 9; use that and say "started a retirement plan".  Once you get the EIN for the Sole Prop, you apply for the EIN (TIN) for the trust, and you check "created a pension trust".

As to the software problem, first, tell them to fix that.  Not having an EIN should NOT prevent the production of a document.  You don't need an EIN to set up a plan; you do need it eventually for the 5500 filing.  If you can't get the EIN, use the Social Security number.  It only shows up in the SPD which you can modify later when you have the real EIN.  We were doing that today until we found out our sole prop who doesn't have an EIN for the sole prop actually is a one man LLC (that's why we ALWAYS ask for the returns before we set up the plan) with an EIN, so we are ok. 

Thanks for the responses. Yes, I know how to apply for the TIN once we have an EIN, it is just not having the EIN that is creating the issues with our document system.  But I agree, we don't really have a need for the EIN /TIN until we file a 5500 or prepare a 1099. 

17 hours ago, AKconsult said:

Thanks Lou.  It looks like if one applies for an EIN as a sole proprietor, the reasons are only:

• started a new business
• Hired an employee
• banking purposes
• changed type of organization
• purchased a business.

I don't see anything for "started a plan".

Actually, "Created a pension plan" is there on page 4 of the instructions.  I agree with the others that an EIN isn't absolutely necessary to establish the plan but we've always had the accountant get one if they don't have one already.

3 hours ago, Bird said:

Actually, "Created a pension plan" is there on page 4 of the instructions.  I agree with the others that an EIN isn't absolutely necessary to establish the plan but we've always had the accountant get one if they don't have one already.

Scratch that; it seems that is meant for applying for a plan EIN.  

3 hours ago, Bird said:

Scratch that; it seems that is meant for applying for a plan EIN.  

3 hours ago, Bird said:

Scratch that; it seems that is meant for applying for a plan EIN.  

3 hours ago, Bird said:

Scratch that; it seems that is meant for applying for a plan EIN.  

Setting up a retirement plan is ALSO a valid reason for getting an EIN for a sole prop who otherwise has no employees.

Agree with Larry 110%---for 40 years have set up plans with less notice than you've received here---

A signed document (or even summary of the document according to the case law) can be valid as evidence of a plan. I prefer to have the entire document signed beforehand or adoption agreement---before midnight on 12/31.

20 hours ago, Bob the Swimmer said:

Agree with Larry 110%---for 40 years have set up plans with less notice than you've received here---

A signed document (or even summary of the document according to the case law) can be valid as evidence of a plan. I prefer to have the entire document signed beforehand or adoption agreement---before midnight on 12/31.

I seem to remember that the case where the summary was deemed adequate for the deduction included the fact that it was a bigger company with a real board of directors and the plan had been discussed and authorized by a vote of the board that was fully documented. I could be remembering it wrong, but if I'm right, that is not the kind of thing that happens often with our clients.  FWIW.

I have several sole-proprietor clients with "SoloK" plans, including my wife and myself. With one exception (my own plan) we use recordkeeper prototypes. My experience is that some recordkeepers will not process a plan adoption agreement without an EIN whereas others will.