On May 2, the IRS issued final regulations requiring taxpayers that obtain employer identification numbers (EINs) to update their information with the IRS (T.D. 9617). The regulations, which will apply beginning Jan. 1, 2014, gives the IRS time to publish the relevant form and instructions, adopt without change proposed regulations that were issued last year (REG‑135491‑10).
The IRS issues EINs (which take the form 00‑0000000) to employers, sole proprietors, corporations, partnerships, nonprofit associations, trusts, estates, government agencies, certain individuals, and other business entities for tax filing and reporting purposes. Apparently, many EINs are issued to nominees that act on the applicant’s behalf but then are no longer authorized to represent the applicant.
To address this problem, the IRS revised Form SS‑4, Application for Employer Identification Number, to require the disclosure of the applicant’s “responsible party“ and that person‘s Social Security number, individual taxpayer identification number, or EIN. The definition of responsible party depends on the type of entity applying for the EIN and is listed in the instructions to Form SS‑4.
The final regulations require any person that has been issued an EIN to provide updated information to the IRS in the manner and frequency required by the forms, instructions, or other appropriate guidance. According to the preamble, following the publication of the final regulations (scheduled for May 6, 2013), the IRS will publish a form for persons issued an EIN to use to disclose the correct application information to the IRS. The relevant form will require these persons to update their application information about the name and taxpayer identifying number of the responsible party within the applicable time frame. The regulations apply to all persons possessing an EIN on or after January 1, 2014 (which means the rules apply retroactively and not only to persons that applied for or were issued EINs after the effective date).
By Sally P. Schreiber, J.D. (sschreiber@aicpa.org), senior editor Journal of Accountancy
Edited and posted by Harold Goedde CPA, CMA, Ph.D.
Dr. Goedde is a former college professor who taught income tax, auditing, personal finance, and financial accounting and has 25 years of experience preparing income tax returns and consulting. He published many accounting and tax articles in professional journals. He is presently retired and does tax return preparation and consulting. He also writes articles on various aspects of taxation. During tax season he works as a volunteer income tax return preparer for seniors and low income persons in the IRS’s VITA program.
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