Note:

A living trust or grantor trust is not an official trust, unless the trust has an official EIN. Taxes on this type of trust are passed through to the grantor of the trust. Grantors of living trusts that do not secure an EIN for the trust must be certified as an individual, when the individual requirements are met.

A grantor includes any person/organization:

Who creates a trust, directly or indirectly by making a gratuitous transfer of cash or other property to a trust

Treated as the owner of any part of a trust

A grantor trust is identified on Line 4c of Form 8802.

Grantor trusts must be certified at the owner's level. The trust itself files a Form 1041 (informational) but is ignored for tax purposes and all income, deductions, etc. are treated as belonging to the owner. Therefore, applicants must identify:

The name and TIN of the trust

The name and TIN of the owner/owners, and depending on whether the owner is an individual or other type entity, the relevant information necessary for certification of that type of person

Authorizations (Form 8821 or like form) from each beneficial owner for which certification is requested. The authorizations must authorize the 3rd party requestor to receive their tax information, and

Authorization from the trustee, when the requestor is other than a trustee in the trust

When one or more of the trust grantors are verified as U.S. Residents and the Form 1041 was filed for the trust when required, issue the certification with a list identifying the grantors that are U.S. residents using one of the TRU.GT paragraphs.

Grantor trusts that are foreign can be certified as a U.S. resident, provided the owner of the trust is a U.S. resident and filed a Form 3520-A, Annual Return of Foreign Trust With a U.S. Owner, and have met all the other trust certification requirements in (5) above, when applicable. Issue certification using one of the interim TRU.3520A.FGNGT paragraphs.

Grantor trust applicants that are foreign trusts that have not filed Form 3520-A, Annual Return of Foreign Trust With a U.S. Owner, identifying the U.S. owner (Form 3520-A Page 3) cannot be certified. Foreign grantor trusts cannot be certified unless the trust owner is identified, and the owner is a U.S. resident. Verification includes submission of:

The signed Form 3520-A

A copy of the trust agreement

Use the chart below to work status codes 650, 520, and 522/322 for grantor trust Applicants.

If

Then

1. Status Code 650

Check for input errors. Use Form 8802 to verify the type of certification application.

2. The application is for VAT, not Income Tax, and required return has been filed

Check the VAT indicator and issue VAT certification using TRU.GT.VAT.

3. No input errors

Follow procedures for securing owners list.

4. Status Code 520

Check for input errors. Verify owners' Names and TINs using owners list, correct, if needed.

5. No input errors or corrections made, and the required return has been filed, but one or more owners failed to file their return

Issue certification with list of owners that filed their required returns using TRU.GT.

6. No input errors or corrections made, return filed if required and one or more of the owners are still invalid

Issue certification with list of owners that filed their required returns using TRU.GT.

7. Status Code 522/322

Check for input errors. Verify owners' names and TIN(s) using owners list, correct, if needed.

8. No input errors and one or more of the owners filed a Form 1040-NR

Issue certification, with list of owners that filed as U.S. residents. If none filed as residents, issue letter 3425.

Certification of a grantor trust, in addition to meeting all the general trust certification requirements, must meet the requirements of a pass-through entity.

The trust must file a return when required.

At least one owner must be a resident of the U.S. for tax purposes.

When none of the owners filed their required tax return, extension, or have a determination letter, reject the grantor trust application.

Do not list owners in the grantor trust that failed to file, failed to provide authorization, filed as a non-resident, or filed a tax return claiming a foreign tax home (Form 2555 filed, see exception), on the Grantor trust certification.