Corporate Name Change

[Koss]

My client is an S-corp that is registered as a corporation with the Ohio Secretary of State. The corporation changed its name from ABC Inc. to XYZ Inc., by filing the proper documents with the office of the Ohio Secretary of State.

As I'm sure everyone here knows, the name change does not require a new EIN.

The bank that has the company's primary checking account is demanding that the company provide a "letter from the IRS" stating that XYZ Inc. can "operate under the EIN" that was issued to ABC Inc.

I have never seen such a letter, and I am not sure how to go about obtaining one. IRS instructions state that the proper procedure for reporting a change in the name of a corporation is to simply file a tax return with the new name (and the same EIN), or to send a letter to the address where tax returns are filed. Will sending such a letter generate a written response from the IRS?

I politely told the banker that I think they are asking for something that does not exist. When pressed, she finally admitted that she has never seen such a letter, either. But she said she has seen a similar letter issued to sole proprietors who are using a fictitious name (i.e., "doing business as" registration with the state), where the letter states that the business may use the proprietor's SSN. She also claimed that she had confirmed with the bank's legal department that this letter is required. Therefore, in her mind, it must exist.

Ultimately, however, she admitted that the letter does not really need to state that XYZ Inc. can use the EIN issued to ABC Inc. Rather, it will be sufficient if my client can produce any letter from the IRS that has the new name and the EIN. And after checking with her legal department, she also told me that they would accept a copy of a signed 941 with the new name and the EIN. So that may be our solution.

Has anyone else encountered this kind of nonsense?

We have a certified copy of the corporate name change filed with the Secretary of State. IRS Publication 1635 states clearly that a corporation may change its name and continue using the same EIN. Why isn't this sufficient?

The banker claims that the documentation they are seeking is required by the banking regulators, i.e., FDIC, OCC, etc.

I would love to ask the bank to produce documentation to support this claim, because I don't think it's accurate. But if they will accept a 941, I'm not going to take this any further.

BMK

[kpangelinan]

My client is an S-corp that is registered as a corporation with the Ohio Secretary of State. The corporation changed its name from ABC Inc. to XYZ Inc., by filing the proper documents with the office of the Ohio Secretary of State.

As I'm sure everyone here knows, the name change does not require a new EIN.

The bank that has the company's primary checking account is demanding that the company provide a "letter from the IRS" stating that XYZ Inc. can "operate under the EIN" that was issued to ABC Inc.

I have never seen such a letter, and I am not sure how to go about obtaining one. IRS instructions state that the proper procedure for reporting a change in the name of a corporation is to simply file a tax return with the new name (and the same EIN), or to send a letter to the address where tax returns are filed. Will sending such a letter generate a written response from the IRS?

I politely told the banker that I think they are asking for something that does not exist. When pressed, she finally admitted that she has never seen such a letter, either. But she said she has seen a similar letter issued to sole proprietors who are using a fictitious name (i.e., "doing business as" registration with the state), where the letter states that the business may use the proprietor's SSN. She also claimed that she had confirmed with the bank's legal department that this letter is required. Therefore, in her mind, it must exist.

Ultimately, however, she admitted that the letter does not really need to state that XYZ Inc. can use the EIN issued to ABC Inc. Rather, it will be sufficient if my client can produce any letter from the IRS that has the new name and the EIN. And after checking with her legal department, she also told me that they would accept a copy of a signed 941 with the new name and the EIN. So that may be our solution.

Has anyone else encountered this kind of nonsense?

We have a certified copy of the corporate name change filed with the Secretary of State. IRS Publication 1635 states clearly that a corporation may change its name and continue using the same EIN. Why isn't this sufficient?

The banker claims that the documentation they are seeking is required by the banking regulators, i.e., FDIC, OCC, etc.

I would love to ask the bank to produce documentation to support this claim, because I don't think it's accurate. But if they will accept a 941, I'm not going to take this any further.

BMK

I had this exact non-sense happen to me at a small town bank up here in Maine.....all you can really do is what you've already done. I told the client that all we can do is provide the paperwork showing the name change from the state and wait to file a 941 or a new 1120/1120S showing the new name and TIN. The client did all the work in complaining to management at the bank until it was resolved as I told him there was nothing I could do other than arguing with the bank's management (which I told him I wouldn't do). He could do that or go to another bank.

[oceanlovin'ea]

some banks or credit unions seem to want some specific proof to open accounts or change accounts that other banks don't require. Sometimes it is just the person you are dealing with.
I think I have figured out that if you want to do something like that it is best to go to the main office of the bank in your town and not to branch locations. That way if a question comes up you have access to bank officials and the bank president, if necessary.
Sometimes the people at the branch don't know exactly what they should do and so they go overboard.

Linda, EA

[Black Bart]

Burton -- For what it's worth,

...Will sending such a letter generate a written response from the IRS?...

I mailed an EIN app and the return letter (CP575A) assigning my client a number stated "If the information isn't correct as shown above, please correct it using tear off stub from this notice and return it to us so we can correct your account." A week later my guy's wife advised that she preferred Bonnie's Bunnies to Jack's Rabbits. I drew a line through the JR on the stub, wrote in the BB, mailed it 5-23-06, and got this IRS letter back 6-28-06.

Bonnie's Bunnies
101 Main St.
Dogpatch, AR

Taxpayer Identification number: 32-9999999

Dear Taxpayer:

Thank you for the inquiry dated May 23, 2006.

We have changed the name on your account as requested. The number shown above is valid for use on all tax accounts.

If you have questions, please call us toll free at 1-800-829-0115.

If you prefer, you may write to us at the address shown at the top of this letter...


While this was on an original app and you don't have a stub, it is a written response and, as a point of information, indicates that names can be changed without filing a tax return.

As a practical matter it took five weeks and as you said, it's probably easiest to just get a signed 941.

Re: nonsensical requests; many bankers (most don't know beans about taxes) seem to assume that attainment of the exalted title -- "LOAN OFFICER" -- also confers a law degree to boot.