The IRS this past Wednesday issued proposed regulations requiring taxpayers with employer identification numbers (EINs) to update them periodically with the IRS.
EINs are issued to businesses, trusts and estates.
What the IRS is concerned about is listing nominees on the original EIN application as officers, partners and what not. The nominee’s authority to act and represent thereafter expires, sometimes as soon as the EIN is received, thus obscuring the true ownership of the entity.
The IRS will be revising its application form – the SS-4 – to identify when a nominee or agent is obtaining an EIN for a principal. The IRS will refer to such nominee as a “responsible party.”
The IRS also states that it will provide further rules on updating EINs – such as forms and frequency - in the future.
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