Change in "Responsible Party" Must Be Reported to IRS

Beginning January 1, 2014, entities with an EIN must file Form 8822-B, completing boxes 8a through 9b to report any changes in their responsible party information.

A responsible party is defined as " the person who has a level of control over, or entitlement to, the funds or assets in hte entity that, as a practial matter, enables the individual, directly or indirectly, to control, manage, or direct the entity and the disposition of its funds and assets".

Form 8822-B must be filed within 60 days of a change in the identity of the responsible party or the party's identifying information.  If a change in the idenity of the enitity's responsible party occurred before 2014 and the entity had not previously notified the IRS fo the change, the entity must file Form 8822-B before March 1, 2014, reporting only the most recent change.

The form states that if the responsible party of an entity with an EIN has changed, use of the form is mandatory, but otherwise, use of the form is voluntary.  An entity will not be subject to penalties for failure to file the form.  However, if the entity fails to provide the entity or the current mailing address of the responsible party and that party fails to receive a notice of deficiencly or demand for tax, penalties and interest will accrue, notwithstanding that the responsible party fails to receive these documents.

 

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