Compliance September 6, 2011

IRS Updates List of Nonbank Trustees and Custodians for Tax-Advantaged Accounts

The Internal Revenue Service has updated its list of entities approved to serve as nonbank trustees or custodians for certain tax-advantaged savings accounts.
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These accounts must be held by a bank or approved nonbank trustee or custodian in order to be tax-exempt, including

  • Archer Medical Savings Account (MSA)
  • Health Savings Account
  • Qualified Retirement Plan Custodial Account
  • 403(b)(7) Custodial Account
  • Individual Retirement Arrangement (IRA)
  • Roth IRA
  • Deferred Compensation Plan of State & Local Government and Tax Exempt Organizations Custodial Accounts
  • Coverdell Education Savings Account

According to the IRS, an entity that is not a bank (or an insurance company in the case of Archer Medical Savings Accounts and health savings accounts) can request to be a nonbank trustee/custodian by applying in writing and demonstrating that certain requirements will be met. 

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The IRS says that it will post periodic updates to the list on its web site, and that it will “frequently update this list” as other nonbank trustees or custodians are added or removed. Entities will be removed from the list after their withdrawal or revocation has become final.

The IRS notes that an approved nonbank trustee or custodian is required to notify the IRS of any change in entity name, address or any other change that may affect the entity’s status as an approved nonbank trustee or custodian.

The list, as of September 1, 2011, is at http://www.irs.gov/pub/irs-tege/nonbank_trustee_list.pdf. 

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