Beginning January 1, 2014, any entity with an EIN (Employer Identification Number) must file Form 8822-B to report the latest change to its responsible party.
The “responsible party” is the person who has a level of control over the funds or assets in the entity that, as a practical matter, enables the individual, directly or indirectly, to control, manage, or direct the entity and the disposition of its funds and assets.
Examples of Responsible Parties
- Nonprofit: Executive or President
- Corporation: Principal Officer
- Partnership: General Partner
- Trust: Grantor, Owner, or Trustee
The above list is not all inclusive. The courts have, in the past, held non-officers, such as controllers and bookkeepers, to be responsible parties in certain cases.
Form 8822-B must be filed within 60 days of the change. If the change in the identity of your responsible party occurred before 2014, and you have not previously notified the IRS of the change, file Form 8822-B before March 1, 2014, reporting only the most recent change.
It’s important to note that the responsible party may have been identified when the entity first applied for an EIN (see the organization’s Form SS-4). If the individual listed as the responsible party has since changed, a nonprofit organization or commercial business must file Form 8822-B by no later than February 28, 2014 to report such change.
The person who has accepted the role of being the responsible party may have greater responsibility and therefore greater exposure to personal liability for failure to pay withholding (payroll) taxes. States may look to responsible parties with respect to other trustee-types of taxes, such as sales tax.
Lastly, the instructions to the form indicate that while there is no penalty for failure to file Form 8822-B, deficiency and other notices may not be delivered to the appropriate individuals, during which time penalties and interest will continue to accrue.
Please contact your AAF Partner or Rich Weiner, Tax Partner, at 774.512.4078 – firstname.lastname@example.org if you have any questions.