IRS Revises EIN Application Process - Responsible Parties Must Be Individuals with a SSN or ITIN

Effective May 13, 2019, entities will be prohibited from using their own Employer Identification Numbers (EINs) as the “responsible party” on applications for additional EINs.  Citing enhancements to security of the EIN process, the IRS announced that when requesting an EIN, whether by paper on Form SS-4, Application for Employer Identification Number, or online individuals named as a responsible party must have a Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN).  Government and military entities are generally exempt from the responsible party requirements.
 
The new policy does not change the rule that tax professionals may act as third-party designees for entities and complete paper or online applications on behalf of their clients.
 

Implications

Foreign entities with responsible parties who do not have a SSN/ITIN should consider requesting an EIN prior to May 13, 2019, if an entity classification election will be filed or the foreign entity will file a U.S. federal tax return. It appears that under the new procedures, foreign entities will no longer be able to show the responsible party’s identifying number as “FOREIGN” when requesting an EIN.  Going forward, it is important to keep in mind that it can take several weeks to apply for and receive an ITIN. Also, an ITIN is currently provided to a foreign individual only in certain situations.
 

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Todd Simmens Partner and Controversy and Procedure Technical Practice Leader		Cathy Stopyra Tax Managing Director
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International Tax:
Joe Calianno Partner and International Tax Technical Practice Leader		Sean Dokko Senior Manager

from BDO USA Tax Publications Feed https://www.bdo.com/insights/tax/federal-tax/irs-revises-ein-application-process-responsible-pa