7/30/2021
Entities with Employer Identification Numbers (EINs) are being urged by the IRS to update their applications if there has been a change in the responsible party or contact information, citing it as a key security issue.
IRS regulations require EIN holders to update responsible party information within 60 days of any change by filing Form 8822-B, Change of Address or Responsible Party - Business. It is critical that the IRS has accurate information in cases of identity theft or other fraud issues related to EINs or business accounts. The data around the responsible parties for entities is often outdated or incorrect. When the IRS doesn't have accurate records of who to contact for identity theft issues, that causes a time-consuming process to identify the point of contact and inquire about suspicious filings. As a result, the IRS is going to begin sending letters to approximately 100,000 EIN holders where it appears the responsible party is outdated beginning in August to step up awareness efforts.
All EIN applications, whether mail, fax, or electronic, must disclose the name and Taxpayer Identification Number (Social Security number, Individual Taxpayer Identification Number, or EIN) of the true principal officer, general partner, grantor, owner or trustor. The IRS defines the responsible party as the individual or entity who "controls, manages, or directs the applicant entity and the disposition of its funds and assets.”
Unless the applicant is a government entity, the responsible party must be an individual, not an entity. If there is more than one responsible party, the entity can list whichever party it wants the IRS to recognize as the responsible party.
EINs are to be used strictly for tax administration purposes. Entities with EINs that are no longer in use should close their IRS tax accounts and follow the steps outlined on the Canceling an EIN - Closing Your Account page.
Here are tips for small businesses, trusts, estates, charities and others about Employer Identification Numbers in this IRS video, Five Things to Know about the Employer Identification Number:
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