Changes in the requirements to request an Employer Identification Number (EIN)

The Internal Revenue Service (IRS) announced that as of May 13, 2019, corporate entities will no longer be able to use their Employer Identification Number (EIN) to obtain an EIN for another entity. Only people with tax identification numbers may request an EIN, this means that the “responsible party” making the request must have a Social Security Number (SSN) or an Individual Taxpayer Identification Number (ITIN, Individual Taxpayer Identification Number).

What is an EIN number?

An Employer Identification Number (EIN) is like a Social Security Number (SSN) for your business. It is a unique nine-digit number assigned by the Internal Revenue Service (IRS) and follows the format XX-XXXXXXX. It is used to file tax returns, open a bank account and hire employees.

Why this change?

According to the IRS, the changes to these rules are aimed at improving security, particularly around international companies that plan to do business in the United States, and increasing transparency in these processes. Applicants who can not provide a valid Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN) at the time of requesting an EIN (or when submitting Form SS-4) will not meet the requirements and an EIN will not be issued.

The IRS is warning with some weeks in advance so that individuals and international companies have time to identify a responsible party that meets the new requirements. If you have any questions, we recommend you contact your trusted advisor to understand how this change may affect your personal situation. If you need help to request an EIN number or to declare your taxes, do not hesitate to contact us at info@gbsgroup.net or schedule a call with us 

You can read the original note on the IRS Website