Can a foreign individual without an Individual Taxpayer Identification Number (“ITIN”) serve as the “responsible party” to obtain a U.S. Employer Identification Number (“EIN”)? In an effort to increase security measures for EIN applications, the IRS issued a notice on March 27th (IR-2019-58) that starting on May 13th, “only individuals with tax identification numbers may request an Employer Identification Number (EIN) as the ‘responsible party’ on the application.” Based on the March 27th notice, one might reasonably conclude a foreign individual who does not possess an ITIN is ineligible to serve as a “responsible party” on the EIN application. Adding to the confusion, the IRS issued another notice on May 7th (IR-2019-89) stating, “Beginning May 13, only individuals with tax identification numbers – either a Social Security number (SSN) or an individual taxpayer identification number (ITIN) – may request an employer identification number.”
If an EIN application was submitted reflecting a responsible party who is a foreign individual without an ITIN, would the IRS accept it? Or, would it be rejected causing a delay of several weeks to months in setting up bank accounts or other important operations of the entity? After informal discussions with the IRS, we have received direction on this question. According to these discussions, the IRS will accept an EIN application listing a foreign individual as the “responsible party” without an ITIN. In Box 7b of the EIN application (Form SS-4) setting forth the ITIN of the responsible party, one should write “foreign” or “not applicable”. This approach has been successful in at least one instance in which it was followed by us.
Should you have any questions regarding the “responsible party” requirements for an EIN application, please contract Brenda L. Roubidoux Taylor (702-550-4470) or a member of the Dickinson Wright Tax Practice Group.
