Some IRS forms are considered “file and forget” documents, meaning once filed they normally don’t require any additional attention. The Internal Revenue Service, though, is reminding that the application for an Employer Identification Number (EIN) isn’t one of them.
The IRS says that those with an EIN—including businesses, partnerships, trusts and estates, charities and others—are required to update their EIN application with current information within 60 days of any change in the Responsible Party.
Keeping current isn’t difficult. Any changes to the EIN application may be made by filing Form 8822-B, Change of Address or Responsible Party – Business.
This information, the agency says, is critical should there be a question of identity theft or other fraud issues tied to the EIN or its parent organization. Wading through out-of-date information can waste valuable time.
“The data around the “responsible parties” for business-type entities is often outdated or incorrect, meaning that the IRS does not have accurate records of who to contact for identity theft issues. This means a time-consuming process to identify the point of contact so the IRS can inquire about a suspicious filing,” an IRS release states.
To increase awareness of the need for updates, the IRS is sending out letters to some 100,000 EIN holders who appear to have out-of-date responsible party information on file.
Current information is required
IRS regulations demand that all applications for an EIN have to show the name of the principal officer—the responsible party. This responsible party can be a general partner, grantor, owner or trustor.
The application also has to include the Taxpayer Identification Number of the responsible party, whether it’s a Social Security number, Individual Taxpayer Identification Number or an EIN.
The IRS defines the responsible party as the person who “controls, manages, or directs the applicant entity and the disposition of its funds and assets.”
The responsible party must be an individual, not an entity such as a board of directors, for example. If there are in fact more than one person who could be a responsible party, the applicant has to choose just one to appear on the EIN application.
If circumstances change and an organization no longer needs its EIN, the IRS says the organization should give up its Employer Identification Number. For information on shedding one’s EIN, see the IRS’ Canceling an EIN – Closing Your Account on the IRS website.
Source: IR-2021-161