Employer Identification Number (EIN) Update your “responsible party”

Effective January 1, 2014, U.S. Internal Revenue Service (IRS) Treasury Decision 9617 (T.D. 9617) required that “any person assigned an employer identification number” must “provide updated information to the IRS”.  This means, if the person identified as the “responsible party” in field 7a of the Form SS-4, Application for Employer Identification Number, filed to obtain your EIN changes, the information must be updated with the IRS.  The form that must be used is Form 8822-B, Change of Address or Responsible Party – Business.

If information on file with the IRS has changed since your initial filing and you have not made a change filing in the past, you must make a filing prior to March 1, 2014.  The new filing needs only provide the most current information.  If any change occurs in the future, a new Form 8822-B must be filed within 60 days of the change.

What constitutes a “change of responsible party”?  This is dependent on whether your company trades shares or interests on a “public exchange” or has its shares or interests “registered with the Securities and Exchange Commission” or is any other kind of entity.  Both are defined in the instructions shown on the back of Form 8822-B, which should be referred to when completing the form.

Failure to update information may result in tax notices not being received.


Applying for an Employer Identification Number (EIN)

The rules for obtaining your EIN by phone have changed. As of January 2014 the IRS will no longer accept requests for EIN’s via telephone. If you do call they will refer you to the online application, which does act up on occasion. So, be ready to prepare and fax the SS-4 application to the IRS and wait for them to fax and/or mail the results to you. This process can take anywhere from 3 days to 3 weeks.


Beneficial Ownership Legislation Proposal

In March 2014 the White House announced a legislative proposal to help law enforcement investigate the use of shell companies that are set up to engage in illegal activity. The President’s proposal would require all companies formed in any state to obtain a federal tax employee identification number. This proposal would require the Internal Revenue Service to collect information on the beneficial owner of any legal entity organized in any state, and would allow law enforcement to access that information.

In addition, the proposal would permit the IRS to share beneficial ownership information with law enforcement officials to identify and investigate criminals who form and misuse U.S. corporate structures to launder criminal proceeds and finance terrorism through the international banking system.

The White House Seal