IBA Compliance Connection

Your go to source for compliance!

One of our customers recently died. A family member has asked us to keep the customer’s deposit account open for about two months to accept refunds of insurance premiums and other credits. Would you recommend opening a new account using the executor’s social security number (SSN)?

—

by

admin

We believe that your customer would need to obtain an employer identification number, also known as a taxpayer identification number (EIN or TIN), for the estate, even if it qualifies as a small estate under Illinois law. The IRS requires that every estate obtain an EIN, no matter the size of the estate. Your institution will need to use a taxpayer identification number if filing a 1099-INT for the account, which should be either an estate’s EIN or a surviving joint owner’s SSN — not the executor’s SSN (unless the executor happens to be the surviving joint owner).

It may be helpful to provide your customer with a copy of IRS Publication 559, as it includes instructions for obtaining an EIN (which is a simple and free process).

For resources related to our guidance, please see:

  • IRS, Publication 559, Personal Representative Duties (“A personal representative of an estate is an executor, administrator, or anyone who is in charge of the decedent’s property . . . . The personal representative also must perform the following duties: Apply for an employer identification number (EIN) for the estate. . . .”)
  • IRS, Publication 559, Identification Number (“Payers of interest and dividends report amounts on Forms 1099 using the identification number of the person to whom the account is payable. After a decedent’s death, Forms 1099 must reflect the identification number (EIN, ITIN, or SSN) of the estate or beneficiary to whom the amounts are payable. As the personal representative handling the estate, you must furnish this identification number to the payer. For example, if interest is payable to the estate, the estate’s EIN must be provided to the payer and used to report the interest on Form 1099-INT. If the interest is payable to a surviving joint owner, the survivor’s identification number, such as an SSN or ITIN, must be provided to the payer and used to report the interest.”)