These final regulations [PDF 225 KB] adopt “without amendment” regulations that were proposed in March 2012.
The final regulations will be published in the Federal Register on Monday, May 6, 2013, and are applicable as of January 1, 2014, as to allow the IRS time to publish the relevant form and instructions.
The reason behind these regulations is that with increasing frequency, employers / EIN applicants authorize individuals to act on the EIN applicants’ behalf—e.g., nominees on the EIN application who are typically listed as principal officers, general partners, grantors, owners, and trustors—but that this authority is often temporary and expires after the EIN application process is completed.
The regulations further require any person issued an EIN to provide updated information to the IRS in the manner and frequency required by forms, instructions, or other appropriate guidance issued by the IRS. This includes updated application information regarding the name and taxpayer identification number of the responsible party.
The updated responsible party information is intended to allow the IRS to ascertain correct ownership details for persons who have an EIN. In turn, the IRS can use that information to contact the appropriate persons when resolving a tax matter related to a business with an EIN and to address “schemes that abuse the tax system through the use of nominees.”
Read TaxNewsFlash-United States (March 13, 2012) concerning the proposed regulations.