One of the most common scenarios we encounter with clients holding Swiss (or other offshore) accounts inside a U.S. revocable living trust is this: “In practice, when opening a Swiss account for a U.S. grantor trust, we typically obtain a separate EIN for the trust to satisfy the bank's compliance and FATCA requirements. But what if you opened it directly with your personal Social Security Number? Should you switch to an EIN now for IRS reporting?”
The short answer: No, you generally do not need to obtain an EIN now—or ever—for IRS tax or information-reporting purposes, as long as the trust remains a domestic grantor trust. Here's the detailed reasoning and what to do next.
Why Swiss Banks Usually Require (or Prefer) an EIN for Trust Accounts
Swiss banks operate under strict anti-money laundering (AML), Know Your Customer (KYC), and FATCA rules. When the account is titled in the name of a U.S. trust (even a domestic revocable one): They often treat the trust as a separate "entity" for onboarding.
- This triggers a request for an EIN as the trust's Tax Identification Number (TIN), along with Form W-8BEN-E (for entities) instead of W-9 (for individuals).
- In our experience assisting clients, banks like UBS, Credit Suisse (now UBS), or private banks insist on this to simplify their internal compliance, even though the IRS doesn't require it for grantor trusts.
Opening with your SSN is possible (and you've already done it successfully), but it's less common because:
- The bank may flag it as a "personal" account mismatched with the trust title.
- It can lead to extra scrutiny or future requests to retitle/convert.
IRS Perspective: SSN Is Perfectly Fine (and Preferred) for Grantor Trusts
If your trust is a domestic grantor trust (revocable or irrevocable but treated as disregarded under IRC §§ 671–679), the IRS ignores the trust entirely for income tax and most reporting:
- You—the grantor—are the owner of the assets, including the Swiss account.
- All income (interest, dividends, etc.) flows to your personal Form 1040 under your SSN.
- FBAR (FinCEN Form 114) and Form 8938 (FATCA) are filed under **your SSN**—you have the financial interest and signature authority.
- No separate trust tax return (Form 1041) or EIN is needed.
- Forms 3520/3520-A
The IRS explicitly allows (and expects) SSN usage for revocable grantor trusts in bank accounts, per Form 1041 instructions and Publication 559. Getting an EIN now would:
- Create duplicative reporting (e.g., unnecessary grantor information statements).
- Potentially confuse the bank or trigger IRS matching issues.
- Offer no IRS benefit—it's purely a bank-side preference.
| Scenario | TIN for IRS Reporting | TIN for Bank Opening (Typical Swiss Practice) | Action Needed? |
|---|---|---|---|
| Standard Grantor Trust (Your Case) | Your SSN | EIN (preferred by bank) | None for IRS; optional bank retitle |
| If Opened with SSN | Your SSN | Your SSN (works, but uncommon) | Keep as-is for IRS compliance |
| Trust Becomes Non-Grantor (e.g., After Death) | Separate EIN | Separate EIN | Apply for EIN then |
What Should You Do If You Opened with Your SSN?
1. For IRS Purposes: Nothing. Continue reporting under your SSN. Ensure:
- Interest/dividends on Schedule B (Form 1040).
- FBAR if aggregate foreign accounts > $10,000 anytime in the year.
- Form 8938 if thresholds met (e.g., >$50,000 single filer in U.S.).
2. For the Bank: Monitor and Consider Retitling (Optional).
- Some clients retitle the account to use a trust EIN for smoother bank relations (e.g., avoids future W-9 vs. W-8 mismatches).
- To do this: Apply for a free EIN online via IRS Form SS-4 (select "trust" and note it's grantor/revocable). Provide to the bank with updated W-8BEN-E.
- But this doesn't change IRS reporting—still your SSN.
3. Deadlines for 2025 Reporting:
- FBAR: April 15, 2026 (auto-extension to Oct. 15).
- Form 8938: With your 1040 (April 15, 2026).
- Track max account value and income.
Penalties for missed filings are severe (e.g., $10,000+ non-willful FBAR), so confirm prior years. If non-compliant, explore Streamlined Procedures.
Bottom line: Your SSN setup is IRS-compliant and simpler—don't complicate it with an EIN unless the bank demands a change or for estate planning. Swiss practices are bank-driven, not IRS-mandated.
Comments
0 comments
Please sign in to leave a comment.