Articles

IRS Enhances Security, Revises EIN Application Process by Angie Adames, CPA

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Posted on April 10, 2019 by Angie Adames

Effective May 13, 2019, the IRS will only issue Employer Identification Numbers (EINs) to entities whose applications name a responsible party who has a Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN). No longer will the IRS accept Form SS-4 or online applications from entities that use their existing EINs to obtain additional EINs. The requirement will apply to both online EIN applications and paper Form SS-4, Application for Employer Identification Number.

An EIN is a nine-digit number that the IRS issues to sole proprietors, corporations, partnerships, estates, trusts, employee retirement plans and other entities to use as identification for tax reporting and tax filing purposes. The responsible party named on an EIN application is typically the entity’s principal officer, general partner, grantor, owner or trustee who has the authority to control, manage and/or direct the entity and the disposition of its funds and assets. When an entity has two or more responsible parties, it must select only one to name on its EIN application. This requirement does not apply to governmental entities (federal, state, local and tribal); as well as the military, including state national guards.

According to the IRS, this new policy is intended to strengthen security in the EIN process by requiring an individual to be the responsible party and improve transparency.

 

About the Author: Angie Adames, CPA, is an associate director of Tax Services with Berkowitz Pollack Brant, where she provides tax and consulting services to real estate companies, manufacturers and closely held business. She can be reached at the firm’s Miami office at (305) 379-7000 or via email at info@bpbcpa.com.