CCA 201221018: Chief Counsel addresses reporting interest on unclaimed funds

Plain-English summary

Chief Counsel Advice addressed how a state office should report interest paid on unclaimed funds under IRC § 6049. The advice said that, assuming a reporting obligation exists, the interest should be reported using the name and taxpayer identification number of the decedent or the decedent's estate, depending on who would include the interest in income. It further stated that a Form 1099-INT should generally use the decedent's name and Social Security number when the interest belongs on the decedent's final return, and the estate's number when the interest is income to the estate.

Ruling snapshot

• Question: Which payee name and taxpayer identification number should be used when reporting interest on unclaimed funds paid after a person's death?
• Outcome: Advice given
• Key authorities: IRC § 6049

Full text (IRS public release)

ID: CCA_2012043013382818 Number: 201221018
Release Date: 5/25/2012
Office: -------------
UILC: 6049.00-00

From: --------------------
Sent: Monday, April 30, 2012 1:38:29 PM
To: -------------------
Cc:
Subject: RE: Section 6049

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As we discussed this morning, I ran the issue past another attorney in the branch who is considerably more knowledgeable about information returns and reporting requirements than I am. Essentially, the state office should report (assuming it has a reporting obligation under section 6049) the interest paid on the unclaimed funds using the name and TIN of the decedent or the decedent's estate, as appropriate. Without regard to payment on a claim by a nursing home or funeral home for services rendered, if the interest being reported is or would be includible on the decedent's final income tax return, then presumably the Form 1099-INT should report the decedent's name and SSN, whereas the estate's number (if there is one) should be used if the interest is income to the estate. In other words, the reporting, in terms of payee name and TIN, seemingly should operate the same as if the funds were held in a bank account. Let me know if you want to discuss or have questions. Thanks.