New Responsible Party Requirements for EIN Applicants

The IRS has announced that starting May 13, 2019, 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 on Form SS-4 (“The SS-4”). The SS-4 instruction’s define responsible party as, “the person who ultimately owns or controls the entity or who exercises ultimate effective control over the entity. The person identified as the responsible party should have a level of control over, or entitlement to, the funds or assets in the entity that, as a practical matter, enables the person, directly or indirectly, to control, manage, or direct the entity and the disposition of its funds and assets.”

Prior to this announcement, the responsible party listed on The SS-4 was not necessarily required to have their own SSN or ITIN. However, the IRS is now enforcing this new requirement of the responsible party in an effort to enhance security and transparency. Additionally, EIN applications that list business entities as the responsible party will no longer be accepted. For more information on responsible party requirements, see the instructions for Form SS-4 and related article from the IRS’ website.

Our firm assists many clients who have the need to create US LLCs and / or Corporations. Often times, this involves applying for a new EIN. If you have any questions or need assistance with forming a new company, including obtaining the EIN, please contact us for more information.