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#17675 - 05/14/02 04:05 PM DBA accounts
Anonymous
Unregistered

We are interested in knowing a few facts about DBA accounts. Can DBA's be opened up with a social security # OR a tax id number?
We were under the impression that a DBA needs to be opened with a social number only with the personal name first and the DBA name on an alternate line.
If you have a DBA with a tax id number it is not really a DBA, it is a true bussiness and needs to be opened as a Bussiness account. Is this not correct?
Please clear this up for us!
Thanks

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General Discussion
#17676 - 05/14/02 04:29 PM Re: DBA accounts
Love those Regs Offline
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Posts: 296
Southern State
Our bank does this like yours - dba's are opened with a SSN. Otherwise, it's not a sole proprietorship which is the premise behind a "dba".
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#17677 - 05/14/02 04:37 PM Re: DBA accounts
Al Miller Offline
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Al Miller
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Pleasanton CA USA
A proprietorship is not required to have an Employer Identification Number (EIN) unless they have employees.

The instructions for an IRS W-9 indicate that either number can be used (SSN or EIN) and you can report interest earned or non-employee compensation under either.

However, check state law. In CA, interest and non-employee compensation MUST be reported under the SSN of a self-employed individual, probably for child support enforcement.
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#17678 - 05/14/02 04:51 PM Re: DBA accounts
Elwood P. Dowd Offline
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A DBA may or may not be a sole proprietorship. In many states, corporations, LLC's & partnerships can also do business under an assumed name as long as they register with the county or state as required by their DBA statute.

As Al indicates, a sole proprietorship can operate under an EIN or the SSN of the owner. Either way, the owner's name should appear first in the account title.

Sole proprietors have EINs for wage withholding, not income tax, purposes. The IRS prefers you use the owner's SSN in connection with bank accounts.

Many banks require the SSN as a matter of policy. It serves their purposes better if their CIF is TIN driven and it is also much more valuable if you want to run the owner through a consumer reporting agency such as ChexSystems.
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#17679 - 05/14/02 06:49 PM Re: DBA accounts
Anonymous
Unregistered

I need to be clear here. Let me give an example.
John Smith is opening an account with a DBA Plant People.
How would I set it up if he were to give me his SSN?
How would I set it up if he were to give me an EIN?

Also, I was under the impression that the first line of the account needed to match the number given. EX: if given a SSN, the person's name is on the first line. If given a EIN, the business name is on the first line. Is this correct or does it not matter?
Are there any government rules for any of this?
Thanks for helping!

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#17680 - 05/14/02 07:00 PM Re: DBA accounts
Al Miller Offline
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Al Miller
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Pleasanton CA USA
Technically, the SS Name used must match with the TIN used. Your processing system may have both a SS Name field and a Name Line 1. It may default to use line 1 if there is no other indicator. Or, you may be able to designate which name line is linked to the TIN.

IRS does not care what name is first on the account, only that information reporting is being done on the customer who wants the reporting and that the name and TIN match.

For legal processes, you usually need the individual name to search. If your system can only do an alphabetical search on name line 1, then you must put the person's name on line 1 so you can search. If you can search on all name lines, it does not matter.
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#17681 - 05/14/02 07:04 PM Re: DBA accounts
Anonymous
Unregistered

Regardless of the TIN you use: John Smith, DBA Plant People.

The IRS is not expecting an income tax return from "Plant People." The income derived from the business goes on Schedule C of John's form 1040. It is John's last name, specifically the first 4 characters of his last name, that the IRS computer is attempting to find in line one of the account title. John's last name will match with either the EIN or the SSN.

Al mentioned the W-9 as a good resource. It is the condensed version of the instructions the IRS issues as a Revenue Procedure for magnetic media reporting every year. Also, if you review the SS-4 (EIN application) and its instructions, it is apparent that, for a sole proprietorship, it is the name of the person that the number is being tied to - the "business" is a figment of the owners' imagination and we humor them by putting it in the account title.



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#17682 - 05/14/02 07:11 PM Re: DBA accounts
Elwood P. Dowd Offline
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Oops..pushed the wrong button? Anonymous is me.
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#17683 - 05/15/02 02:53 PM Re: DBA accounts
KimC Offline
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Posts: 145
Minnesota
Another issue to consider would be levies or garnishments that probably will come with the sole proprietor's social. It is easier on our computer system to find all accounts that would be affected if they have common TIN's. Our practice is to use only social security numbers on sole proprietor accounts. Even if they have a Fed ID # we don't use it. As mentioned earlier they only need that number if they have employees. We decide what TIN to use based on what TIN the business uses to file their tax return. One exception to the rule we recently discovered was that LLC's can also use a social if they are a sole owner LLC.

Unrelated to TIN's but does anyone allow POD's on any kind of business account?

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#17684 - 05/15/02 03:39 PM Re: DBA accounts
BrendaC Offline
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BrendaC
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Sweet Home AL
We sometimes have TIN mismatch problems which stem from our failure to properly maintain our system's IRS control names. Someone in your bank needs to understand how your system creates the IRS control name to insure you are providing correct information on your IRS tapes. For example: John Smith dba Plant People should report to IRS with the SSN (or EIN) = SMIT. The Estate of John Smith will also be EIN=SMIT. These type errors cause continuing headaches and TIN mismatches for us all. If you haven't been to an IRS reporting seminar, it might be worth your time and effort. It's a real eye opener!
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#17685 - 05/15/02 05:15 PM Re: DBA accounts
Anonymous
Unregistered

Only a natural person can have a POD. A business may dissolve or end, but it does not die. You should have a death certificate before turning money over to a POD beneficiary.

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#17686 - 11/20/02 06:18 PM Re: DBA accounts
Anonymous
Unregistered

I have a DBA question that I attached to this thread. We have a customer that wants to open a DBA account with 2 DBA names (I don't know why...) ie. John Doe DBA John's Garage/John's Autos

Is this doable? Sounds like a way to avoid a service charge for having 2 accounts, but I can't find anything prohibiting it.

FYI, we're in Illinois.

Thanks in advance.

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#17687 - 11/20/02 06:41 PM Re: DBA accounts
John Burnett Offline
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Cape Cod
Unless your bank has a policy on multiple "fictitious names" on one account, I am not aware of any prohibition. It's more common than we might think that a SP uses more than one trade name.

For many SP accounts, relatively low balances mean that it's less expensive for the bank to have one "combined" account than two separate accounts for the two businesses.
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#17688 - 11/20/02 07:41 PM Re: DBA accounts
Anonymous
Unregistered

Thanks John!

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#17689 - 11/20/02 07:56 PM Re: DBA accounts
BANNED BY BOL MANAGEMENT Offline
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BANNED BY BOL MANAGEMENT
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Perhaps it's a given, but any DBA must present a certificate or other document from (usually) the county clerk that certifies that they are the "owner" of that specify DBA name.

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#17690 - 11/20/02 08:31 PM Re: DBA accounts
Andy_Z Offline
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This isn't specific to the business name, but relates to the location of the owner and additional dba requirement.

An interesting side bar for Texas banks (I don't know if others would have a similar requirement) is that Texas law requires the bank to have the business owners name, home address and drivers license number as a condition of opening and maintaining the business checking account. The purpose is better known further into the requirement where it says the bank may not unreasonably withhold this information from payees of dishonored checks.

I don't know the cite where this was put into our laws but HB2000, from 1999 is where it originated. Just in case you wanted to ask.

(Not wanting to "let it go", I had to look up the cite, 277.003, at this site.)
Last edited by Andy Z; 11/20/02 08:36 PM.
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#17691 - 11/20/02 08:36 PM Re: DBA accounts
Michelle M Offline
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Andy, are you saying that in Texas if a Sole Proprietor writes you a check and it's NSF or bad for some reason the bank is required to disclose the home address of the owner?
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#17692 - 11/20/02 08:38 PM Re: DBA accounts
Andy_Z Offline
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Pretty much. I just added a link to the law in my edit above.
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My opinions are not necessarily my employers.
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Rules and Regs minus Relationships equals Resentment and Rebellion. John Maxwell

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#17693 - 11/20/02 08:54 PM Re: DBA accounts
Michelle M Offline
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Michelle M
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Posts: 422
Maybe it's just me, but I would consider that a safety issue. I mean if that person was written a bad check then they're probably already irate, they can carry a fire arm, and now they have the business owners home address. I just wouldn't want to be the person to give out that info.

Then again maybe business owners in Texas are just dang sure to make good on their checks.
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#17694 - 11/20/02 09:03 PM Re: DBA accounts
Andy_Z Offline
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Two thoughts, the law releases us from liability (good), and Texas does have a concealed handgun law (bad).

I have not heard of a qualified request being made, but that certainly doesn't mean it hasn't.
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AndyZ CRCM
My opinions are not necessarily my employers.
R+R-R=R+R
Rules and Regs minus Relationships equals Resentment and Rebellion. John Maxwell

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#17695 - 11/20/02 09:08 PM Re: DBA accounts
Kara S Offline
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Posts: 927
Milwaukee, WI
WOW, I would definetly be scared to write a bad check to the wrong person in Texas. But then again, Texas has the death penalty, right?
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#17696 - 11/20/02 09:19 PM Re: DBA accounts
Andy_Z Offline
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In reply to:

But then again, Texas has the death penalty, right?


In record numbers, but not for hot checks. (Boy wouldn't that deter the bounce programs.)
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AndyZ CRCM
My opinions are not necessarily my employers.
R+R-R=R+R
Rules and Regs minus Relationships equals Resentment and Rebellion. John Maxwell

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