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January 10, 2018Client Alert

IRS Reminds You – Get an EIN For your Retirement Plan Trust!

The IRS recently issued a reminder that retirement plan trustees should NOT use the plan sponsor’s employer identification number (EIN) in relation to their retirement plan trust. This is a common oversight on the part of plan sponsors, but results in confusion surrounding the appropriate owner of plan assets (and muddles the appropriate segregation of plan assets in a distinct entity that is protected from assignment, alienation, etc.). In short, plan sponsors should use the trust EIN when opening a bank account or conducting other transactions with respect to the retirement plan. If a retirement plan is audited by the IRS, this issue is likely to arise.

Your retirement plan service provider/consultant should be able to confirm whether your retirement plan has its own EIN. If it does not, applying for an EIN is free and simple. Beware of websites on the Internet that charge for this free service.

To obtain an EIN for a retirement plan trust, the plan trustee or its delegate (e.g., service provider or attorney) can apply online, or via mail or fax with Form SS-4, Application for Employer Identification Number to the IRS. More information on filing is available here. According to the IRS, the online EIN application is the preferred method for applying for and obtaining an EIN. Through this process, an EIN can be issued immediately.

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