The Internal Revenue Service has announced that, starting May 13, all applications for an employer identification number (EIN), whether submitted on-line or on Form SS-4, will require the name of an individual and either a Social Security number (SSN) or individual tax identification number (ITIN) for the “responsible party” of the entity for which the EIN is requested. IR-2019-58 (3/27/2019).
A “responsible party” is a person who ultimately controls or owns the entity or who exercises ultimate effective control over the entity. For estates and trusts, that would normally seem to be one of the personal representatives or trustees. (However, the instructions to Form SS-4 somewhat confusingly state that the responsible party for a trust is a “grantor, owner, or trustor,” which doesn’t seem right, especially for a testamentary trust.) For those estates or trusts for which the personal representative or trustee is a bank or trust company, the new requirement would apparently prevent the application from using the name and EIN of the corporate fiduciary, and would instead require the name and SSN of a trust officer responsible for the estate or trust.
This new requirement is intended to prevent one entity (such as a corporation or partnership) from applying for a EIN for another entity. The IRS apparently wants to be able to identify an individual responsible for the operations of the new entity, probably so that it will be easier to investigate possible frauds or evasions.