Prop. Regs. Would Require Taxpayers That Received EINs to Update Information

On March 14, the IRS issued proposed regulations that would require taxpayers that obtain employer identification numbers (EINs) to update their information with the IRS (REG-135491-10).

The IRS issues EINs (which take the form 00-0000000) to employers, sole proprietors, corporations, partnerships, nonprofit associations, trusts, estates, government agencies, certain individuals, and other business entities for tax filing and reporting purposes. Apparently, many EINs are issued to nominees that act on the applicant’s behalf, but then are no longer authorized to represent the applicant.

To address this problem, the IRS recently revised Form SS-4, Application for Employer Identification Number, to require the disclosure of the applicant’s “responsible party” and that person’s Social Security number, individual taxpayer identification number, or EIN. The definition of responsible party depends on the type of entity applying for the EIN and is listed in the instructions to Form SS-4.

The proposed regulations require any person that has been issued an EIN to provide updated information to the IRS in the manner and frequency required by the forms, instructions, or other appropriate guidance, which the IRS will issue in the near future. The regulations would apply to all persons possessing an EIN after the rules are finalized (which would mean the rules would be retroactive and not apply only to persons that applied for or were issued EINs after that date).