The Employer Identification Number (EIN) is a unique 9-digit number that is assigned by the IRS to businesses operating in the United States. Partnerships and corporations including trusts and estates are required to apply for EIN for the payment of employment taxes and filing of business tax returns. Aside from the IRS website, EIN application form is also available through zoom filings, a third-party designee that will work on your behalf.
Last December 2017, the Internal Revenue Service announced new instructions on the process of application for EIN. Updated instructions to Form SS-4 Application for Employer Identification Number require that the responsible party must now be an individual and not an entity. Responsible party is defined as the person that ultimately owns or controls the applicant. He must also exercise ultimate effective control over the applicant. Example of a responsible party is the principal officer of a publicly traded corporation or a person that manages the business.
Before the updated instructions, IRS permits the responsible party to be an entity. Now that the responsible party is an individual, IRS requires the Social Security Number or the Individual’s Taxpayer Identification Number. Exception to the rule is when the responsible party not eligible to obtain the SSN or ITIN.
However, an important omission to the updated instructions is the guidance that SSN, ITIN or EIN is not required for the responsible party in cases where the applicant is a non-resident alien or foreign entity that is applying for EIN. In this particular instance, the applicant is required to write “foreign domicile” on the line 7B of the EIN application form. According to several representatives from the IRS, EIN can be assigned to a foreign applicant with no legal residence, principal office or agency in the US even if the responsible party has no SSN, ITIN or EIN.
The application for EIN can be quite complex for some businesses but there is zoom filing that can provide assistance to applicants. The online website works on behalf of consumers and is not associated with IRS or any government agency. The sole purpose is to assist applicants in obtaining EIN.