IRS urges EINs Updates to stem Identity Theft and Other Frauds

August 27, 2021

The IRS has advised taxpayers with Employer Identification Numbers (EINs) to update their applications if there has been a change in responsible party or contact information.

The tax agency stated in IR-2021-161 that such updates should be filed using Form 8822-B, Change of Address or Responsible Party - Business, within 60 days of a change.

The impetus for documenting these changes in a timely manner is to improve security issues so that the IRS can better recognize identity theft or other fraud issues.

From the IRS's IR-2021-161 release:

The data around the ‘responsible parties’ for business-type entities is often outdated or incorrect, meaning that the IRS does not have accurate records of who to contact for identity theft issues. This means a time-consuming process to identify the point of contact so the IRS can inquire about a suspicious filing.

As a result, the IRS intends to step up its awareness efforts aimed at businesses, partnerships, trusts and estates, charities and other entities that are EIN holders. Starting in August, the IRS will begin sending letters to approximately 100,000 EIN holders where it appears the responsible party is outdated.

EIN applications submitted by mail, fax or computer must include the name and Taxpayer Identification Number (Social Security number, Individual Taxpayer Identification Number or EIN) of the true principal officer, general partner, grantor, owner or trustor.

The IRS defines the responsible party as the individual or entity who "controls, manages, or directs the applicant entity and the disposition of its funds and assets." Additional information regarding responsible parties can be found here.

Unless the applicant is a government entity, the responsible party must be an individual, not an entity. If there is more than one responsible party, the entity may list whichever party the entity wants the IRS to recognize as the responsible party.

The IRS website includes a “Identity Theft Central” page that can be found here.


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