Identification of Taxpayer (Levies and FI)

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Question:

Levy-related: The IRS provides an alternative on Form W-9 for individuals to provide an SSN or an EIN. I believe FIs are required to obtain an SSN for an individual as her/his TIN and so the issue is not applicable from an FI perspective. As a non-FI in a trade or business receiving W-9s where an individual has opted to provide an EIN rather than an SSN, a levy may identify an individual by SSN such that we cannot guarantee that the levy is for the same individual (two people with the same name). Giving the volume of levies that FIs deal with, I am hoping you may have guidance regarding the identification of the taxpayer in the circumstance I have described.

Answer:

With regard to individuals, the IRS has a stated preference that you obtain the individual's SSN for accounts in his/her name, including any sole proprietorship accounts.

But if you have a levy, and are unsure as to whether it targets a customer with a name that's the same as the one on the levy, compare any address information first. If that's not definitive, contact the IRS or state office that issued the levy for clarification.

First published on BankersOnline.com 7/18/11