IRS Revises EIN Application Process to Enhance Security

May 9, 2019|

Earlier this year, the Internal Revenue Service (IRS) announced only individuals with tax identification numbers may request an Employer Identification Number as “the responsible party.”

Those individuals must have either a Social Security number or an individual taxpayer identification number. This is generally the person within a business who owns or controls the entity or exercises ultimate control over the entity. For example, within a corporation, that person may be a principal officer.

More than one person may meet this definition. If that is the case, the business may decide which person should be the “responsible party” in whatever manner they see fit.

The change prohibits entities from using their own EINs to obtain additional EINs and applies to both the Form SS-4 and the online EIN application. By requiring an individual to be the responsible party, there will be more transparency and greater security in the process of obtaining an EIN. This new update goes into effect May 13, 2019.

Read the IRS news release for details.