It is our policy not to open Irrevocable Trusts using the social security number of the grantor. However, recently, an attorney is pushing us to do this and is quoting Sec 301.6109 (a)(2)(B), which states "a trust that is treated as owned by one grantor or other person under sections 671-678 need not obtain a taxpayer identification number". Then, I consulted with a CPA who told me that the trust needs a separate TIN and need to file separate tax returns. I think it the use of the SSN is allowable but I don't like it. In a prior thread someone mentioned it as being a PATRIOT ACT violation since we don't have the number of the Trust who is considered our customer. Has anyone had experience with this?

Of the two professionals you consulted, which do you think would have a better handle on what the IRS requires as an identifying number for an irrevocable trust? I imagine you'd look to the CPA as the better-qualified expert, and I'd agree. Unless an attorney has a tax practice, I'd go to a dentist for a sprained ankle before I'd go to an attorney for advice on IRS rules.

The citation that the attorney gave you applies to revocable grantor trusts. The grantor gets to treat the trust as his property for tax purposes because he can pull the plug on (that's the revocable part) the trust at will.

If the trust is irrevocable, the grantor cannot use the cited section of the IRC.

And yes, accepting the grantor's SSN as the identifying number for an irrevocable trust would technically be a violation of 31 CFR 103.121 -- the CIP regulations.

CPA's right. Lawyer's wrong.

Thanks John and Ken. You guys are so helpful.

I have seen Qualified Income Trusts which are irrevocable trusts that use a social security number; however, these are special. They are considered grantor trusts for tax purposes, but there are federal laws that govern their use. In these special cases, we obtain the trust document and CIP the trustee and beneficiary. The beneficiary of the trust is the customer/account owner.

Agreed, if it's a a qualified income trust an SSN is acceptable.