Good Morning!
This is a question regarding the tax ID numbers of a revocable family trust.
The Trust certification indicates the husbands social security is the tax id for the trust (he is also 1st trustee).

There seems to be some confusion with two customer profiles, one non-person (the trust) and one person (trustee) having the same tax id number.

How is the compliant way to set these types of accounts up?
And any direction to the supporting documentation would be appreciated.

~Chrissey

IRS states that family trusts do not create a separate legal entity. If the trustee is one of the grantors, you may use the SSN of the first named guarantor.

On our computer system, we have the ability to indicate which name line the TIN is attached to for tax reporting. Simply mark it as the trustee and your 1099 form should be correct.

Dottiec,
Thanks for the info.. Maybe my question wasnt clear to readers.

In our system, I have a profile for the Trust, and another profile for the person. Both display when searching a single tax id number. Im arguing that it is perfectly acceptable to have a non-person and person profile with the same tax id number. its not like its two persons sharing a tax id number.

But, to give credibility to my argument, I kinda need the chapter and verse!

Unless I am the one way off base and this is not acceptable?

~Chrissey

A grantor trust is a separate legal entity; that is its primary function. However, it may be disregarded for income tax purposes only and is, thus, allowed to use the SSN of one of the grantors.

I do not understand whether you are encountering a systems problem that will not allow you to do this or a persuasion problem with a co-worker. If it's the former, you will need to sort this out with your core provider.

If it's a persuasion problem, then it's important that the people understand there are a number of circumstances where an entity can be "disregarded" for income tax purposes and use the TIN of a different entity. For example, a single member LLC where that member is a partnership or a corporation can use the partnership or corporation's EIN. Also, a corporation may have a number of separate corporate subsidiaries, all using the "parent's" EIN.

The same is true for a grantor trust. It can file a separate income tax return from the grantor or it may just provide the grantor with a schedule of its income. Then, the grantor is responsible for declaring and paying taxes on the income. In that circumstance, the trust may use the grantor's SSN.

Chrissey - I don't think you are going to find the chapter and verse reference you are looking for because yours is an internal procedures issue. If you want to have the ability to access both profies by the TIN, you will be using the same SSN. As explained, the trust doesn't have its own unique profile--yet.

Thank you for all your input

This is definitely a persuasion issue. I have been instructed to "clean up" customer profiles. Where there are some obvious duplication, this trust issue is on every trust account I house. Im not sure deleting the trust profile is the "compliant" way to go, nor is deleting the trustee's profile, and we all know its not required for this type of trust to have its own EIN... Its convincing someone else that they may not be 100% right in telling us to delete the trust profiles in question that is my challenge. The "system" isnt the problem. The person is! HA!

You might want to look back at your Board approved CIP policy for reference. How does it address Revocable Trust Account documentation?