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Changes to EIN application form, instructions for “check-the-box” entities

Changes to EIN application form, “check-the-box”

The IRS made changes to Form SS-4 that is used to apply for an employer identification number (EIN).

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The revisions to Form SS-4 specifically affect eligible entities requesting an EIN solely for purposes of filing Form 8832, Entity Classification Election, pursuant to the “check-the-box” regulations.

Form SS-4 [PDF 115 KB], Application for Employer Identification Number, and the instructions [PDF 181 KB] for Form SS-4 both reflect a revision date notation of “(Rev. December 2017).”

Check-the-box responsible party

Entities requesting an EIN are required to provide the name of a “responsible party” and generally the responsible person’s tax identification number. The Form SS-4 instructions provide a definition of responsible party as the person who ultimately owns or controls the entity or who exercises ultimate effective control over the entity. The instructions continue by explaining that: 

…the person identified as the responsible party should have a level of control over, or entitlement to, the funds or assets in the entity that, as a practical matter, enables the person, directly or indirectly, to control, manage or direct the entity and the disposition of its funds and assets. Unless the applicant is a government entity, the responsible party must be an individual (i.e., a natural person), not an entity.[Emphasis in original]

The instructions continue to explain that if the application for the EIN on Form SS-4 is for a government entity, then the EIN of the responsible party is entered on line 7b. Otherwise, the applicant must enter a social security number (SSN) or taxpayer identification number (TIN) on line 7b (unless the responsible party does not have and is not eligible to obtain an SSN or TIN, and then line 7b is to be left blank).

KPMG observation

The prior version of the instructions to Form SS-4 provided that if the only reason for applying for an EIN was to make an entity classification election pursuant to Reg. section 301.7701-3(c) on Form 8832, then there was no requirement to enter an SSN, ITIN, or EIN on line 7b. 

The new version of the instructions has removed that exception for supplying an SSN, ITIN, or EIN for the responsible person. Some have observed that this may make it more difficult for entities to obtain EINs and/or slow down the process for making timely check-the-box elections.

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