What do you do when Trust beneficiaries refuse to provide their SSN?

[rhalexda]

There are not yet any income disbursements from my mother's trust, so two of my siblings refuse to give me, the trustee, their SSNs so that I can file the trust's form 1041 income tax. Even though there are no disbursements or K-1's, TurboTax Business will not let me e-file without SSN's for all beneficiaries.

The only thing I can think of is to delete them from the list of beneficiaries for this year, since no K-1's will filed anyway, and re-add them for next year when there are disbursements of income?

[M-MTax · Accepted solution]

§ 301.6109-1 Identifying numbers.

(c) Requirement to furnish another's number.

...

When the person making the return, statement, or other document does not know the number of the other person, and has complied with the request provision of this paragraph (c), such person must sign an affidavit on the transmittal document forwarding such returns, statements, or other documents to the Internal Revenue Service, so stating.

§ 31.3406(h)-2 Special rules.

(c) Trusts. Withholding under section 3406 applies to reportable payments made to a trust if any of the conditions for imposing withholding under section 3406 apply to the trust. Generally, a trust is not a payor and will not be required to withhold under section 3406 on reportable payments that it makes to its beneficiary who is subject to withholding under section 3406. The preceding sentence does not apply, however, to a grantor trustdescribed in § 31.3406(a)-2(b)(1) or (2), which is treated as a payor. The trustee of a trust described in this paragraph (c) may certify that the trust's taxpayer identification number is correct and that the trust is not subject to withholding due to notified payee underreporting, without regard to the status of the beneficiaries of the trust.

[rhalexda]

Thank you.

But in looking at section (c), I find it confusing. It begins by stating that: "Every person required under this title to make a return, statement, or other document must furnish such taxpayer identifying numbers of other U.S. persons and foreign persons...," the language regarding making a request and subsequent affidavit, seems to be conditioned upon that person being a foreign person described in section (b)(2). Section (c) states that, "If the person making the return, statement, or other document does not know the taxpayer identifying number of the other person, and such other person is one that is described in paragraph (b)(2)(i), (ii), (iii), (vi), (vii), or (viii) of this section, [all of which relate only to foreign persons], such person must request the other person's number. The request should state that the identifying number is required to be furnished under authority of law." All of which refers only to foreign persons.

Although the very next sentence does not explicitly limit the requirement to request the identifying nimber to foreign persons, the that it refers to has only been mentioned in context relating to foreign persons:

"When the person making the return, statement, or other document does not know the number of the other person, and has complied with the request provision of this paragraph (c)," [which so far has only been mentioned in the context of foreign persons], "such person must sign an affidavit on the transmittal document forwarding such returns, statements, or other documents to the Internal Revenue Service, so stating."

Is this the authority for requiring a request and subsequent affidavit?

If so, it is very confusing and poorly drafted.

[M-MTax · Accepted solution]

Either backup withholding or an affidavit, those are your choices. You can threaten to withhold payment to the bene until that person gives you a TIN.