The IRS implemented a new Form 8822-B on January 1st.  It requires you to update your business’ responsible party information.  Unless you have the same person responsible for your business taxes, including payroll taxes, since your company was formed, you need to file this form no later than March 1, 2014.  While there are no penalties for not filing this form, if you don’t receive a notice because it is not updated the IRS will not consider abatement of any penalties and interest related to that notice.

This begs to question who is a “responsible party”?  A responsible party is defined as “the person who has a level of control over, or entitlement to, 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” according to the form instructions.  “If the responsible party is an alien individual the entity should enter the person’s individual tax identification number in the space provided and submit a copy of an official identifying document or, if necessary, complete Form W-7, Application for IRS Individual Taxpayer Identification Number,” according to Michael Dell in the Tax Advisor.

Going forward Form 8822-B must be filed within 60 days of a change in responsible party.

If you need assistance with this new requirement, please contact our experts at JamisonMoneyFarmer PC