Welcome to CPA at Law, helping individuals and small businesses plan for the future and keep what they have.

This is the personal blog of Sterling Olander, a Certified Public Accountant and Utah-licensed attorney. For over nine years, I have assisted clients with estate planning and administration, tax mitigation, tax controversies, small business planning, asset protection, and nonprofit law.

I write about any legal, tax, or technological information that I find interesting or useful in serving my clients. All ideas expressed herein are my own and don't constitute legal or tax advice.

More Guidance on IRS Online EIN Applications

The owner of a new business entity can obtain an Employer Identification Number online from the IRS at no charge; in a previous post, I described how to resolve error codes in the online EIN application form. Alternatively, the owner can complete IRS Form SS-4 and submit the form to the IRS so that an IRS agent can assign the EIN. Finally, the owner of a business can enlist the assistance of someone else to obtain an EIN on his or her behalf; such person is known as a "Third Party Designee."

Before a Third Party Designee can obtain an EIN number, he or she must have an IRS Form SS-4 signed by the business owner with the Third Party Designee section completed. This authorizes the designee to receive the entity’s EIN and answer questions the IRS may have about the completion of the form. The requirement that the designee have a completed Form SS-4 signed by the business owner applies regardless of whether the designee is submitting the Form SS-4 to the IRS or applying for the EIN online; however, the designee will not need to actually produce the Form SS-4 if the online application process is utilized.

According to the IRS, a designee who has a signed SS-4 and intends to obtain an EIN online for the business owner must also have the taxpayer sign an additional statement: "The taxpayer must read and sign a statement that he/she understands that he/she is authorizing the third party to apply for and receive the EIN on his/her behalf, and answer questions about completion of the form. A copy of the signed statement must be retained in the third party's files." This additional statement is clearly in addition to the SS-4, because the designee must certify in the online application process as follows: "The taxpayer has completed and signed a Form SS-4, including the TPD Section and has read and signed a statement authorizing me to apply for and receive an EIN on his/her behalf. I have retained copies of both documents in my files."

Oddly, the Form SS-4 instructs the business owner to complete the Third Party Designee section if they "want to authorize the named individual to receive the entity’s EIN and answer questions about the completion of this form." It is difficult to see what additional benefit arises when the business owner signs the additional statement because it is substantially similar to a statement already appearing on the SS-4. The requirement for the additional statement only arises if the designee is utilizing the online application process, but the additional statement isn't even required to expressly state that the online application process will be used. Nevertheless, these two documents are what a third party designee is instructed by the IRS to obtain and retain in their files.