Our customer would like to have their business name show on their paperwork from our bank rather than their legal name. Is it acceptable for us to have a separate line for the legal name that would be reported to the IRS, but would not show up on their receipts, statements, and other bank materials?

Is their business name not legal?

While you must do information reporting under the name shown in IRS records, your mainframe probably has a "tax name" field or pointer. It only defaults to "name line 1" if you don't tell it to look elsewhere.


Al

In this instance it is a sole proprietor with a couple of businesses. They would like the statements, receipts, etc to just have the business name not the "sole prop name DBA legal name."

Like Al mentioned, you should be able to set up an "alternate name" that only reads what the customer wants it to. The CIF for the customer must have the full legal name so it is reported correctly. The tax forms at year end should show the full name, so your customer needs to be aware of that

Just to address a pet peeve of mine, if I may ...

It isn't their "legal" name, it is their "trade" name. Their legal name, in this situation, is the name on their birth certificate. Trade names, even registered trade names, are not legal entities. They are marketing tools.

It's also important that the true ownership of the accounts be reflected on your records for deposit insurance purposes. "Joe's Hamburger Stand" doesn't own the account. Joseph P. Smith, the sole proprietor, is the owner.

But if you can work your system so that the business's trade name (a/k/a fictitious name, a/k/a "DBA" name) prints on statements, go for it.

Where I'd draw the line, however, would be if your depositor becomes a borrower. I'd make certain that everything about loan accounts reflects the legal name of the borrower.