IRS Shuts Down Many International EIN?s

By Michael Banner - Apr 30, 2019      Comments     

 The IRS has recently ruled (IR-2019-58) that effective May 13, only individuals with tax identification numbers may request an Employer Identification Number or EIN as the “responsible party” on the application.

A responsible party is generally the person who ultimately owns or controls the entity or who exercises ultimate effective control over the entity. In cases where more than one person meets that definition, the entity may decide which individual is the responsible party.

This change is significant, because it effectively shuts down the ability of a non-US citizen or US resident from getting an EIN for an entity they own, unless they have a social security number (SSN) or individual taxpayer identification number (ITIN). Until now, non-US citizens or non-US residents were able to obtain an EIN by submitting a copy of their entity’s formation documents and a completed SS4, with “000-00-0000” as their SSN/ITIN, and seven to fourteen days later, the IRS would generate the entity’s EIN. This practice has now been halted.

An entity’s responsible party can obtain an ITIN, if they don’t have one, either directly from the IRS or through a third-party acceptance agent. But if the responsible party does not have either an SSN or ITIN, their entity will not be able to obtain an EIN until either a new responsible party is assigned, or the responsible party obtains their ITIN.
Also excluded under this new rule, is the practice of other entities using their own EIN’s to obtain additional EINs for other entities. This practice had been also acceptable until now.

The IRS states, “The new requirement will provide greater security to the EIN process by requiring an individual to be the responsible party and improve transparency.”

If the responsible party is to be changed, the IRS must be notified by completing Form 8822-B and filing it within 60 days of a change.

Because of these changes, SmallBiZ.com has ceased taking International EIN applications, and will only process Full EIN orders for entities with a responsible party having an SSN or ITIN.

Tags: EIN  International EIN  
About Michael Banner
  CEO & Founder of SmallBiZ.com, created over twenty years ago to help small business owners simplify the process of starting & managing their small businesses. SmallBiZ.com now serves over 10,000 businesses per year with various filing and subscription services; in addition to the 1000's of daily visitors to www.smallbiz.com, accessing free services, help pages, & educational videos & webinars.


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