The Internal Revenue Service recently announced that beginning May 13, corporate entities will no longer be allowed to use their existing Employer Identification Number (EIN) to obtain an EIN for another entity. Only individuals with tax identification numbers may request an EIN as the “responsible party” on the application.
The changes to the IRS rules are geared around enhancing security, particularly surrounding international companies planning to do business in the United States. While the full impact of these changes remains to be seen, applicants that cannot provide a valid Social Security Number or Individual Taxpayer Identification Number at the time of applying for an EIN (or by filing Form SS-4), likely will not meet the requirements and won’t be issued an EIN.
The IRS is giving a few weeks’ notice so that international individuals and companies have time to identify a responsible party that meets the new requirements. We encourage clients to review the full text of the update and contact the appropriate counsel for guidance on their specific situation.
Harbor Compliance is not an accounting or law firm and does not provide tax, financial, or legal advice.
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