Opening A New Account – Did You Know?

There are several myths surrounding IRS name/TIN matching requirements. The most common is that the name on an account must appear exactly as it does on the customer’s Social Security card in order to achieve a match on the IRS system. Not true. The IRS does have very specific guidelines for matching a name to a taxpayer identification number, but they focus on a few letters, not the complete name of the customer.

The name control consists of four characters. The IRS’s name control system recognizes all alphabetic and numeric characters. The dash (-) and the ampersand (&) are the only acceptable special characters.

When a deposit account subject to information reporting; i.e. an interest bearing account, is opened, a TIN compliance program has three objectives:

  •  establish “reasonable cause” regarding the TIN,
  •  determine whether backup withholding is required and
  •  impose backup withholding if necessary.

Questions like this and many more will be answered at the IBA New Accounts Evening Seminars presented by Laura Wilson of Pegasus Educational Services, LLC, in twelve locations across the state. See the IBA website for more details.


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