We occasionally get a call asking for a nominee service to obtain EIN numbers. For various reasons, clients would rather not give their personal information to the IRS. In the past, some nominee services offered to obtain an EIN for a client or company by providing the IRS with a name and Social Security Number that is not affiliated with the company.
The IRS has made it clear that this is no longer acceptable. The most recent statement from the IRS concerning this matter, dated February 10, 2010, states:
The Internal Revenue Service revised Form SS-4, Application for Employer Identification Number, to clearly identify the applicant’s true owner. Effective January 2010, all mail, fax, phone, and electronic EIN applications must disclose the name and taxpayer identification number of the true “responsible party” for the entity requesting an EIN.
A nominee is an entity with delegated authority to act in name only and can never be the “responsible party” for the Form SS-4 application. The IRS does not accept the use of nominees to obtain EINs. The SS-4 must be signed by an individual with the authority to legally bind the entity; therefore, it cannot be signed by a nominee.
Prior to the SS-4 revision, taxpayers obtained EINs using nominee individuals for the EIN application process. Entities that used nominees on their applications should consider updating the information shown on the original application. Third party designees filing online applications must retain a complete copy of the paper Form SS-4, signed by the responsible party, and a signed authorization statement, for each EIN application filed with the IRS.
Using nominees in the EIN application process prevents the IRS from gathering appropriate information on entity ownership. It may also facilitate tax non-compliance by entities and their owners. Clearly identifying an entity’s true owner makes it difficult for taxpayers to conceal their income and assets. The IRS will pursue penalties, injunctions, or other enforcement action to prevent the misuse of EIN applications.
Businesses need an EIN to open bank accounts, hire employees, and conduct business. To apply for an EIN for your business, you can file directly with the IRS or we at Harvard Business Services, Inc. can eliminate the hassle and file the document for you, with your signature. We can expedite your application, for a reasonable fee, and guarantee you an EIN within 24 hours. Our job is to obtain the EIN on your behalf in order to relieve you of the frustration, and allow you to do what you do best, operate your business!