Don't Use Nominees to Obtain an EIN

Generally, an Employer Identification Number (EIN) is requested by listing on the application an individual or entity who is the entity's true responsible party as the principal officer, general partner, grantor, owner, or trustor. The "responsible party" is the individual or entity that controls, manages, or directs the entity and the disposition of the entity's funds and assets.  A nominee, however,  is someone who is given limited authority to act on behalf of an entity, usually for a limited period of time, and usually during the formation of the entity. A nominee should not request an EIN.

If you used a nominee when applying for an EIN visit the Updating Incorrect Business Entity page to learn how to correct the information.

TAX NEWS - NOVEMBER 2009

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