The American Bankers Association wrote to the Internal Revenue Service last week seeking relief from certain aspects of the new IRS’ application process for obtaining an Employer Identification Number for trusts and estates of descendants. Under the new application process, bank employees are required to report personally identifiable information—such as a Social Security number or individual taxpayer identification number—in order to obtain an EIN for trusts or estates.
“We understand the interest of the IRS to enhance security and provide a contact, but we believe the regulated nature of banks distinguishes them from other EIN applicants,” the association said in its comment letter. “[W]e urge that the IRS allow a bank applicant to identify itself as the trustee or executor, as well as the Responsible Party, using the bank’s name and EIN.” ABA also urged the IRS to acknowledge that banks may also establish certain trusts in which the institution acts as both the grantor and the trustee of the common trust fund or collective investment trust.
The association also warned that without this change, it could affect banks’ ability to open new trust and estate accounts in a timely fashion, give rise to legal and liability concerns, create communications challenges between the bank and the IRS and require banks to adopt new policy procedures to manage the risks of sharing employee PII outside the institution.