• New Requirement Applies To Any Business Seeking A Tax ID Number

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    May 14, 2019
     
     
    New Requirement Applies To Any Business Seeking A Tax ID Number
    The Internal Revenue Service wants small business taxpayers and the self-employed to know that, as of Monday, May 13, an important change took effect in the way it issues employer identification numbers, or EINs.
    EINs and Responsible Parties
    As of 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. This new requirement, which was first announced by the IRS in March, will provide greater security to the EIN process by requiring an individual to be the responsible party and will also improve transparency.
    An EIN is a nine-digit tax identification number assigned to sole proprietors, corporations, partnerships, estates, trusts, employee retirement plans and other entities for tax-filing and reporting purposes.
    The change prohibits entities from using their own EINs to obtain additional EINs. The new requirement applies to both the paper Form SS-4, Application for Employer Identification Number, and online EIN applications.
    Data Security
    Individuals are not the only ones who need to protect their identities. Businesses and other organizations, especially trusts, estates and partnerships, can also be victims of identity theft. For example, criminals may file Forms 1120 (corporations), 1120S (S corporations) or Schedules K-1 in their names. Last year, 2,450 businesses reported that they were victims of tax-related identity theft, a 10-percent increase over 2017.
    Businesses and other organizations can help combat identity theft by educating their employees, clients and customers. Businesses should also educate their payroll and human resources employees about a dangerous phishing scam. The Form W-2 scam tricks payroll and human resources employees into sharing employee wage and income information by posing as a company executive.
    For additional information on scams affecting businesses visit BBB Scam Tracker or the IRS website.
     
     
     
     
     
       
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    Tammy Ward, Communications Director
    (850) 429-0002