Revised EIN application to enhance security, transparency

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April 2019

Overview

The IRS on March 27 announced that starting May 13, 2019, as part of its ongoing security review, only individuals with either a Social Security Number (SSN) or an Individual Tax Identification Number (ITIN) may be listed as the ‘responsible party’ on an entity’s Employer Identification Number (EIN) application, i.e., Form SS-4.

This requirement to list an individual as the responsible party was included in the current Instructions to Form SS-4, released in December 2017. (See our insight Revised Form SS-4 instructions provide needed clarity.) Although this requirement was announced over a year ago, the IRS has continued to process applications for EINs — i.e., nine-digit TINs assigned to sole proprietors, corporations, partnerships, estates, trusts, employee retirement plans, and other entities for tax filing and reporting purposes — that list another entity and its EIN as the responsible party.

The March 27 announcement is intended to provide greater security and transparency to the EIN application process by requiring individuals to be designated as responsible parties. Entities and their advisors must be diligent in identifying the proper responsible officials and preparing to comply with this policy by May 13.

The takeaway

The March 27 announcement makes clear that starting May 13, 2019, the IRS will begin enforcing the requirement that an individual with an SSN or ITIN must (1) be listed as the responsible party when an entity applies for an EIN and (2) list his or her SSN or ITIN on the application. The IRS no longer will accept applications for EINs that list a business entity as a responsible party (with limited exceptions). However, it remains to be seen whether the IRS will continue to allow a foreign individual who is ineligible to obtain an SSN or ITIN to be listed as the responsible party, as provided in the December 2017 Instructions for Form SS-4.

Contact us

Kevin Brown

Principal, Tax Controversy and Regulatory Services Leader, PwC US

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