I am working with a Profit Sharing Plan that the IRS is auditing for 2007. This plan, which was administered by the ADA (American Dental Association), was terminated and paid out in 2008. During the audit the agent found where a participant was not paid the correct vesting percentage due to the plan termination. The participant has elected to take a taxable distribution of the amount due her.

The plan sponsor closed his corporation back in 2003, and the Federal and State Tax ID's were also closed. The former president of the company is writing distribution checks for this participant from his personal bank account.

Will I have to apply for new Federal and State EIN's in order to process the taxes withheld on this distribution? Or is there another way to deposit and report these taxes? The ADA is not involved in making this distribution.

Thanks.

I assume you mean the corp. closed its books in 2008 (& not 2003). If 2003, then how did it treat the 2008 termination distributions?

Why not open an account in the name of the Plan at a bank, and, when the distribution is made, the bank issues the 1099-R under its own EIN? (Technically, that would require a Form 5500 filing, I guess.) Or, ask the reviewing agent how he/she suggests it be done.