cballard[at]tyyni.net wrote:

- quote -

The original post states that the client is an
EXECUTOR/trustee. I'm not sure that the rule you cite would
apply to an ESTATE or to a trust that has been combined with
an estate for administrative purposes under IRC 645. But,
it's a good question. <grin
MTW

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"Nan, EA in LA" <naneklund[at]aol.com> wrote:

- quote -

Party pooper!

--
Phil Marti
Clarksburg, MD

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"Ernie Klein" <ecklein[at]pacbell.net> wrote ............
- quote -

Provide an accurate NAME & ADDRESS of the recipient,
IRS Entity Examiner will locate the SSN via IDRS NAME INDEX.

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I like David Woods suggestion. And I appreciate the other ones.

However, my question was based on a frantic call from the
client/executor whe had just had a nasty refusal from her
sibling and I totally forgot to ask whether or not all the
distributions had been made. I'll find out and let you
know the next installment.

Isn't tax season fun? An appointment was just made by the
divorcing second spouse of an old client whose return I'm
sure I'll do along with that of his first spouse and the
married child of that first marriage. Fast note to the
secretary - DO NOT SCHEDULE ANY OF THESE ON THE SAME DAY !

Nan, EA in LA

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Nan, EA in LA wrote:

- quote -

Despite the recommendations by several people to resort to
backup withholding, doing so would be improper. Generally
speaking, an irrevocable trust is not considered a payor for
backup withholding purposes, so the backup withholding rules
do not apply to irrevocable trusts (they do apply to grantor
trusts, but that is not the situation in the poster's
question). Reg 31.3406(h)-2(c).

Your only real recourse is found in Code section 6109.
Under that section, the beneficiary is obligated to provide
you with his social security number, but there is no
mechanism for the trustee to enforce the provision. If the
beneficiary refuses to comply, the trustee is supposed to
request the number from the beneficiary in writing,
indicating that the beneficiary is required by law to
furnish the number. Reg =A7 301.6109-1(c). If the
beneficiary continues to provide the number, the trustee is
supposed to include an affidavit with the trust's tax return
indicating the fact that the trustee has requested the
number in writing but that the beneficiary has refused to
comply. Reg =A7 301.6109-1(c).

If the trustee does not follow this procedure, filing the
return with a missing social security number could result in
penalties being imposed on the trustee for failing to file a
correct payee statement under Code section 6722. The base
penalty would be $50, but the penalty could be increased to
the greater of $100 or 10% of the total of the icome shown
on the K-1 if the IRS finds that there was an intentional
disregard of the requirement to file an accurate payee
statement.

Under section 6109, the trust tax return is considered a
separate return by each beneficiary for the beneficiary's
portion of the income. If the trustee includes the required
affidavit, presumably, the IRS would go after the
beneficiary for the 6722 penalty. If the proper procedures
were followed, the beneficiary should have been advised in
writing that the social security number was required by law.
In that case, it would be fairly easy for the IRS to allege
an intentional disregard of the requirement to provide the
social security number, so the beneficiary could very easily
be looking at a penalty equal to the larger of $100 or 10%
of the amount of income shown on the K-1.

--Chris Ballard

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"Ernie Klein" <ecklein[at]pacbell.net> wrote:

- quote -

IF backup withholding applies, it applies at the time of
distribution and it's not the executor's choice whether or
not to find out what his responsibilities are. If he can't
get the TIN now that the train has left the station, perhaps
he can collect whatever this is going to cost him from his
legal advisor, who should have told him all his
responsibilities.

--
Phil Marti
Clarksburg, MD

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Ernie Klein <ecklein[at]pacbell.net> wrote:

- quote -

The executor should pray, because he could end up having to
pay the taxes out of his own pocket.

If the probate is still open he could apply for a court
order requiring the beneficiary to turn over his social
security number. But once the money's been distributed
there's really little leverage.

Stu

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"Stuart A. Bronstein" <spamtrap[at]sbcglobal.net> wrote:
- quote -

I have read many responses to the question that (almost all)
suggest backup withholding, but that assumes that the
distribution is in the _future_. Maybe I am reading the
question wrong, but the OP is asking about filing a K1 for
an estate which is usually only done _after_ the
distribution has been made.

Maybe I am reading this wrong, but assuming I am correct
(for the sake of argument), if all estate distributions have
been made (i.e. no assets left in the estate at all --
nothing to withhold), and all the estate is doing is filing
after-the-fact paperwork (k-1's), then what should/can the
estate do at this point?

--
-Ernie-

"There are only two kinds of computer users -- those who have
suffered a catastrophic hard drive failure, and those who will."
Have you done your backup today?

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"Nan, EA in LA" <naneklund[at]aol.com> wrote:

- quote -

Live ammunition.

--
David M. Woods, EA, ChFC, CLU
Woods Financial Services
Norwood, MA 02062
www.woods-financial.com

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hmurphy[at]earthlink.newt says...

- quote -

I thought it was 1987 that the requirement for SSNs started
to phase in.

My read on the original question is that the money has
already been distributed and the poster is ready to prepare
K-1s.

Gary

--
E-mail to the above address is rarely read. If you want to
contact me directly, please send an e-mail to: gary at
gdgoodman dot com.

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"Nan, EA in LA" <naneklund[at]aol.com> wrote:

Have you gone the W-9 route?????

If so file without and wait for the IRS to mandate the 30%
(I think) withholding on any distributions. With no tax
number the individual will not be able to get the monies and
you'll be able to have the last laugh.

Regards,

Mark

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"Nan, EA in LA" <naneklund[at]aol.com> wrote:

- quote -

There are requirements for backup withholding for someone
who won't give his SS number. When you do that you'll issue
a 1099 showing the distribution and the tax withheld. He
can file a return to get it back.

Stu

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If the anonymous son is under about 35, the client might be
able to request a copy of the decedent's 1991 tax return.
This is when the IRS first required SSNs for dependents
IIRC.

Hank Murphy
speaking only for myself

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Nan, EA in LA wrote:

- quote -

Just thinking out loud... You ~might~ be required to
implement backup withholding in a situation like this.

MTW

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"Nan, EA in LA" <naneklund[at]aol.com> wrote:

- quote -

I'd send him a certified letter transmitting Form W-9 and
asking for its prompt return. As I recall the W-9 explains
legal requirements and backup withholding.

I seem to recall that some payors are required to backup
withhold if the payee refuses to provide a TIN. Be sure to
check into that.

--
Phil Marti
Clarksburg, MD

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Nan, EA in LA <naneklund[at]aol.com> wrote:

- quote -

Can the distributions be held in escrow pending receipt of a
W-9?

__
Art Kamlet ArtKamlet [at] AOL.com Columbus OH K2PZH

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Client is executor/trustee and will file a 1041 with 5 K-1s
for herself and siblings. One brother is a pain in the ____
and refuses, among other things, to give his Social Security
number. I am thinking we should just file the K-1 with a
note to IRS that this person refuses to comply. Any other
suggestions?

Nan, EA in LA

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