EIN application change highlights ‘responsible party’

In a move aimed at improved security and transparency, the IRS recently revised the process to apply for an Employer Identification Number (EIN), limiting the title of “responsible party” to individuals only.

Effective May 13, entities (such as corporations or LLCs) are no longer allowed to be named a responsible party – the person who owns or exercises effective control over the entity and has a Social Security number (SSN) or individual taxpayer identification number (ITIN) – in EIN applications.

Going forward, businesses must make a careful decision on the individual who best meets the definition for “responsible party.”

Learn more here.

– Kevin F. Israel, Meyer, Unkovic & Scott, KFI@MUSLAW.COM