OK, this may be a stupid question but when someone dies and a Revocable Trust becomes an Irrevocable Trust and a new EIN is issued how does the IRS link the Decedent’s 1040 to the Trust’s 1041 since the 1041 has the new EIN but not the Decendent’s Social Security Number? Can’t go by the name only because for example there might be a lot of a John Does who died and John Doe Trusts.
There is not a system in place to identify 100% such transitions. Because the United States is a self-reporting system, there are many issues like this that get missed- either by accident or on purpose.
With the computer systems, the IRS has been able to track more- for example, they can see when there is an RMD one year then it "disappears" or the computer might be able to trace the accounts when the final return is filed but looking at the 1099-Rs reported by Schwab (because Schwab would issue with the new tax id number).
Thanks for your quick answer. That’s unbelievable that there is not such a system in place considering that computers have been around for years! I am a former computer programmer so I always think like one and ask questions.