Final rules require EIN updates

BY SALLY P. SCHREIBER, J.D.

On Friday, the IRS issued final regulations requiring taxpayers that obtain employer identification numbers (EINs) to update their information with the IRS (T.D. 9617). The regulations, which will apply beginning Jan. 1, 2014, to give the IRS time to publish the relevant form and instructions, adopt without change proposed regulations that were issued last year (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 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 final 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. According to the preamble, following the publication of the final regulations (scheduled for May 6, 2013), the IRS will publish a form for persons issued an EIN to use to disclose the correct application information to the IRS. The relevant form will require these persons to update application information about the name and taxpayer identifying number of the responsible party within the applicable time frame. The regulations apply to all persons possessing an EIN on or after Jan. 1, 2014 (which means the rules apply retroactively and not only to persons that applied for or were issued EINs after the effective date).

Sally P. Schreiber ( sschreiber@aicpa.org ) is a JofA senior editor.

SPONSORED REPORT

Questions to ask before committing to the cloud

Cloud computing has its pros and cons. In this report, we answer common questions CPAs may have as they consider transitioning partially or fully to the cloud.

QUIZ

News quiz: Experts offer guidance on accounting standards

Take this short quiz to see how much you know about the news, including a couple of SEC announcements, and facts cited in the guidance experts have offered on accounting standards.

CHECKLIST

Auditing risks in culture

Cultural flaws can seriously damage an organization. Here’s how internal auditors can reduce risks by embedding culture audits into existing audit programs.