Verifying Authorized Signers Under CIP
Answer by John Burnett and Ken Golliher, BOL Gurus Guru Bio
Question: Prior to the CIP being enforced beginning October 1, is it a current rule within the Patriot Act or other law or regulation that we must obtain social security numbers for authorized signers on a business account? What about after October 1?
Answer by John Burnett:
Under current rules, you must obtain the TIN (usually an EIN for businesses, SSN (preferable) or EIN for sole props and SSN for some LLCs) for an owner of the account. You need not obtain the SSN of signers on the business account (except as the TIN of the business (see previous sentence)).
After October 1, nothing much really changes. You are still required to obtain the TIN of your customer (in this case the business). In my opinion, you will no longer have the option of obtaining a sole prop's SSN or EIN (you'll need the SSN). The regs do not require you to obtain ID info, including SSN, on authorized signers for corporate accounts. But your CIP may require it.
Answer by Ken Golliher:
I hadn't thought about it that way, but it's a good point. You would be required to obtain the SSN. You would be allowed to also obtain the EIN for information reporting purposes. However, since the IRS prefers you use the SSN anyway, I would just stick with getting the SSN and telling the customer I didn't want the EIN. Why get stuck with managing two numbers?
Oh yeah, I agree there is no legal requirement to verify the identity of signatories on entity accounts, either now or after 10/01/03. However, prudence may dictate otherwise.
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