Rev. Rul. 84-73

1984-1 C.B. 240, 1984-20 I.R.B. 5.

                       Internal Revenue Service
                                 Revenue Ruling

      TAXPAYER IDENTIFICATION NUMBER;  SAVINGS ACCOUNT INTEREST; DECEDENTS

                            Published: May 14, 1984

Section 6049. - -Returns Regarding Payments of Interest, 26 CFR 1.6049-1:  Returns of information as to interest paid in calendar years before 1983 and original issue discount includible in gross income for calendar years before 1983.

Section 6109. - -Identifying Numbers, 26 CFR 301.6109. - 1: Identifying numbers.

(Also Sections 6049, 6676;  1.6049-1, 301.6676-1.)

  Taxpayer identification number;  savings account interest; decedents.  Payors of interest must use the identifying number of the person to whom the account is payable in reporting interest on a Form 1099.  Interest is reported under the decedent's social security number only until the date of death.  From the date of death, interest is either reported under the estate's identifying number or the social security number of the surviving owner.

ISSUE

  What taxpayer identification numbers should be used by a financial institution for reporting interest payments credited to

single-owner and joint accounts after the death of the account owner?

FACTS

  A died on October 1, 1983.  On the date of death A had 2 savings accounts, both of which carried A's taxpayer identification number. One account was in A's name only.  It earned interest of $500 from January 1, 1983, to A's death, and an additional $60 from A's death to November 1, 1983, when A's spouse, the executor of A's estate, closed the account.

  The other account was in the name of A and A's spouse, as joint owners with rights of survivorship.  At A's death, A's spouse became sole owner.  This account earned $3,000 interest from January 1, 1983, to A's death, and an additional $1,200 from A's death until December 31, 1983.  As executor, A's spouse notified the bank in which the accounts were held of A's death on November 1, 1983, and provided it with the estate's identifying number, as well as the spouse's own social security number, by filing Forms W-9, Payer's Request for Taxpayer Identification Number.

LAW AND ANALYSIS

  Under section 6049 of the Internal Revenue Code, every person who makes interest payments, or who receives interest payments as a nominee, totalling $10 or more during any calendar year must make a return, according to the forms or regulations prescribed by the Secretary, setting forth the total amount of such payments, or the total amount includible in gross income, and the name and address of the person to whom paid.

  Section 1.6049-1 of the Income Tax Regulations sets forth the requirements for the reporting of interest and designates Forms 1099, Statement for Recipient, and 1096, Annual Summary and Transmittal of U.S. Information Returns, as the proper forms to use for the information return.

  Under section 6109(a) of the Code, every person required to make a return must include the identifying number prescribed for securing proper identification of the person.  Any person required to make a return for another person must request the proper identifying number from that person, and that person must furnish the proper number to the person making the return.

  Under section 31.6109-1(a) of the regulations, returns required to be filed must reflect such identifying numbers as are required by each return and its related instructions.

  Section 6676(a) of the Code imposes a penalty of $5 for each failure of a person to include his or her taxpayer identification number in any return, and a $50 penalty for each failure to furnish a taxpayer identification number to another person and for the failure to include the identification number of another person in any return for the other person unless the failure was due to reasonable cause and not wilful neglect.  The total amount imposed on a person for all failures during any calendar year may not exceed $50,000.  For payments made after December 31, 1983, section 105 of the Interest and Dividend Tax Compliance Act of 1983, 1983-43 I.R.B. 21, 26, amended section 6676 by adding a new section 6676(b), which provides a $50 penalty for any payor of interest, dividends or patronage dividends that fails to include a number, or includes an incorrect number, unless the payor can show that it exercised due diligence in attempting to satisfy the requirements.

  Rev. Rul. 64-99, 1964-1 (Part I) C.B. 482, holds that if a return or other document is required to be filed for an estate or

trust, including returns of information under sections 6042 and 6049 of the Code, the fiduciary must obtain and furnish an identifying number to be included in that return or document even though the estate or trust will be closed during the year.  The identifying number to be used by an estate or trust is an employer identification number.  It must be furnished to any payor of interest or other person required to make a return with respect to the estate.

  Payors of interest must use the identifying number of the person to whom the account is payable in reporting interest on Form 1099. If the interest is payable to an estate, under Rev. Rul. 64-99 the administrator or executor must furnish the estate's employer identification number, not the decedent's social security number, to the payor.  If the interest is paid to a surviving joint owner, the survivor must furnish his or her identifying number to the payor.

HOLDING

  A's social security number must be used for both accounts to report interest earned prior to A's death.

  After A's death, the estate's employer identification number must be used to report the $60 paid to A's estate in 1983.

  The social security number of A's spouse must be used to report $1,200 payable to the spouse after A's death.

  Under the above facts, failure by a bank to use the proper identification number may result in imposition of the penalty imposed under section 6676 of the Code.

Rev. Rul. 84-73, 1984-1 C.B. 240, 1984-20 I.R.B. 5.