The IRS gave my trust a new EIN -- do I need to specify "initial return" when I do the next Form 1041?

[rmfrog1]

In Dec 2019, my folks passed away

[LeonardS]

No, it is not the initial return for the trust.  It is an existing trust that IRS has given a new EIN to

[LeonardS]

No, it is not the initial return for the trust.  It is an existing trust that IRS has given a new EIN to

[rmfrog1]

OK, thanks for the prompt response.

After thinking about this and considering that all of the income generated for the trust in tax year 2021 was reported using the old EIN, I plan to submit the tax return for tax year 2021 using that old EIN. Then I will notify the proper entities about the EIN change for tax year 2022 (ie, they need to use the new EIN) and will submit the tax returns for tax year 2022 and beyond with the new EIN.  Does that sound like the right course of action? Also, I plan to fully document this situation in a letter to the IRS and the other trustees for future reference. Thanks, again, for your help with this.

[MinhT1]

If the IRS has given your trust a new EIN, their database has been changed and you should report your new EIN on your trust's tax return, otherwise there would be a mismatch and your e-filed return will be rejected.

The new EIN does not make your trust a new trust, and you can report the trust income even if the tax documents for these incomes bear the old EIN.

[rmfrog1]

OK, thanks. 

This makes me wonder if I should do any of the following:

1) file a 'final return' with no monetary data for the JMFT trust with the 'old'EIN (ie, 123) to 'close it out'

2) file the 2021 tax return with the new name (ie FFT) and the new EIN (ie, 789) and ask anyone who sent a 1099 to the trust with the 'old EIN' to submit an amended 1099 with the new EIN? one of those who sent a 1099 is a brokerage firm so that might be tricky.

3) just file the 2021 tax return with the new name (ie FFT) and with the new EIN (ie, 789) 

More questions:

A) Is there an IRS form that can be used to tell them that an EIN is being replaced with another EIN? in this case replace the EIN 123 with the new EIN 789? this would be helpful to connect the initial tax return filed in 2020 to the future tax returns that use the new EIN 789.

B) Do I need to be concerned with the 2020 return (the first & inital tax return) that used the FFT name and the old EIN (ie, 123) now that 123 will no longer be used and is just 'in limbo-land'?

C) Also, do I need to be concerned with the old trust name (JFMT) and the old EIN (ie, 123) now that 123 will no longer be used and is just 'in limbo-land'?

Thanks, again, for your time and expertise on this.

[ThomasM125]

It would be safe to file a final trust tax return as you mention, as you can be penalized for filing a late return and that would guarantee that this would not happen. Then, report all of the tax documents on a new trust tax return using the new number.

I wouldn't bother to request the amended tax forms, as most companies will not agree to do that.  

There isn't a tax form to report the change from one ID number to another, you should just submit a disclosure form explaining what you did with the two trust tax returns that you file.

Since you filed the first return correctly, you don't need to worry about it, plus if you file a final return using that number, the IRS will know not to expect another return using that ID number.

[rmfrog1]

OK, sounds like submitting a 'final return' for the FFT and the old EIN is the proper thing to do to close that old EIN.  Then all future returns will be filed for the FFT with the new EIN.  

But I'm still a little confused about not filing an 'initial return' for the FFT with the new EIN. I think someone on this chain has said not to do that since an initial return was done for the FFT with the old EIN. If I do a final for the old EIN, will the IRS know that the FFT is using the new EIN when I file the return for tax year 2022 without an 'initial return'? What are your thoughts on that? Also, how do I submit a 'disclosure form' like you mentioned so I can explain this unusual situation?

PS - I'm having problems finding my original question and all the follow-up. Can you tell me how to do that?  When an update is made, I get an e-mail with a link to that update (which I click on) but I only see the reply but not the entire chain of remarks. How can I see that? For example, how can I see all the questions to the community that I have created and that are open (ie, unclosed)? Thanks. 

[DianeW777 · Accepted solution]

The answer for the trust return is that your situation is unusual.  The fact is that this is not the initial return for this trust even though you have a new EIN.  You can simply attach a statement explaining the change of the EIN and do not check the box for initial return. However, the first EIN trust return should be marked final and you can include the same statement with that return. 

To access your questions and answers you can log into your Community account by clicking here. If for some reason you have forgotten your login credentials you can contact TurboTax for Account Recovery. (Click the blue hyperlinks)

@rmfrog1

[Edited: 02/22/2022 | 5:50a PST]

[rmfrog1]

OK, I have gotten my answers. Thanks to everyone who provided input. I will mark this item as complete/closed.