When applying for a U.S. EIN, the Responsible Party’s information is critical. This guide explains the IRS definition, legal requirements, key form fields, and common mistakes, helping you get approved without delays.
Responsible Party Information Requirements: What You Must Know for Your EIN Application
When applying for a U.S. Employer Identification Number (EIN), one of the most important details you must provide is the Responsible Party information. Incorrect or incomplete details can lead to delays, IRS inquiries, or even rejection of your application. This guide will walk you through the definition, requirements, and best practices for filling out the Responsible Party section correctly.
1. What Is a Responsible Party?
According to the IRS, the Responsible Party is the individual who controls, manages, or directs the applicant entity and has access to its funds and assets.
- For businesses, this is usually the owner, general partner, or principal officer.
- For trusts, it is typically the trustee.
- The Responsible Party must be an individual (not a company) except in rare IRS-approved cases.
2. IRS Requirements for the Responsible Party
- Legal Name: Must match official identification (passport, SSN record, or ITIN record).
- Taxpayer Identification Number (TIN): Can be an SSN, ITIN, or for non-U.S. residents, sometimes “Foreign” is acceptable if applying by mail/fax.
- U.S. Address: Recommended for smoother IRS correspondence, though foreign addresses are allowed for non-residents.
- Must be an Individual: Businesses cannot be listed as the Responsible Party, except for government entities.
3. Common Mistakes to Avoid
- Using a company name instead of a person’s name.
- Providing mismatched name and TIN—must match IRS or SSA records.
- Using an outdated Responsible Party—if ownership changes, you must update with Form 8822-B within 60 days.
- Leaving the field blank or vague—this is a required field.
4. How to Update the Responsible Party
If your Responsible Party changes (e.g., new owner, CEO, or trustee), you must notify the IRS:
- Form to Use: Form 8822-B
- Deadline: Within 60 days of the change
- Method: Mail to the IRS address specified in the form instructions
5. Best Practices for a Smooth EIN Application
- Double-check spelling and TIN before submission.
- Use a permanent address where mail can be reliably received.
- Keep a copy of your SS-4 form for your records.
- If you are a non-U.S. resident, prepare identification documents in advance in case the IRS requests verification.
Conclusion
The Responsible Party section is more than just a formality—it’s a legal requirement that ensures the IRS knows who is ultimately accountable for the entity. By providing accurate and up-to-date information, you can avoid unnecessary delays and keep your business in good standing.