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Account Styling SSN vs EIN

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Question: 
If a sole proprietorship account is styled Jane Doe dba Jane's Jeans, we would use Jane Doe's SSN for the tax ID. If Jane's Jeans has its own EIN, should the account be styled the same? I always understood the first name on the legal title should match the tax ID number.
Answer: 

The true owner of the account should be listed in your account records. In the case of a sole proprietorship, that's the owner of the business.

Both the individual's SSN from the Social Security Administration and the EIN issued by the IRS are listed by their respective issuers under the individual's name. Although either can be used in your records, and either may be included on any 1099 you might issue, the IRS states a preference for the SSN, since the taxpayer files his business income on Schedule C with his individual form 1040, under his SSN.

Couple this with the CIP requirement that you obtain the SSN from a U.S. individual (including a sole proprietor) in completing your Section 326 regulation compliance, and you have a very strong argument in favor of using the SSN on these accounts.

First published on BankersOnline.com 10/18/04

First published on 10/18/2004

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