Using Formal Names For IRS Reporting

Answered by:

Question:

For IRS reporting purposes, are banks required to file using customer's formal names? If the customer's SSN is accurate, can the customer name be more casual, or even a nickname in some cases?

Answer:

Answer by John Burnett

You should strive to use the customer's legal name in all cases. The use of "nicknames" would not ordinarily cause problems with the IRS, however, since they key on last names for their name/number match program.

I'm not in favor of allowing nicknames on deposit account records, but see nothing particularly wrong with using them on checks. Of course, some people have been saddled with such unhappy monickers they legally adopt a less formal name.

Answer:

Answer by Ken Golliher

I agree with John and the rule I learned from bankers and now suggest to other bankers (that's what trainers do) is: "I will open an account using any name that you have primary identification for."

For example, if the customer wants an account titled:
"Running Bear"
or
"Jane Smith VanBuren"

and that's what her drivers license says, we're good to go. Otherwise, the bank's records need to show the name on the identification. (Initials for first and middle names are OK)

I can muster up a little flexibility on the checks, but still think that the people taking checks from my customer are entitled to know who they are dealing with. If he wants to be "K.W. 'Slick' Golliher" on the checks that's fine.

First published on BankersOnline.com 9/16/02