On March 27, the IRS announced that starting May 13 only an individual with a Social Security Number or Individual Taxpayer Identification Number (“ITIN”) may request an Employer Identification Number (“EIN”) for an entity as the “responsible party” on the application. The change, which is designed to provide greater security and transparency in the EIN application process, essentially prohibits entities from using their own EINs to obtain additional EINs. The new requirement will apply to both the paper Form SS-4, Application for Employer Identification Number, and the online EIN application.
Not discussed in the IRS announcement is whether the current practice of listing a foreign individual as the responsible party and entering “foreign” or “foreigner” as the taxpayer identification number on the paper Form SS-4 will be affected. Our view is that it is very likely the IRS will no longer permit that practice and all SS-4 applications will be required to list a taxpayer identification number for the responsible party. This means that foreign individuals who which to obtain an EIN for an entity will first be required to obtain an ITIN.
If you have any questions regarding the EIN application process, please contact us and we would be happy to help.
