EIN Responsible Party for LLC

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EIN Responsible Party: Who can be the Responsible Party for your LLC?

Important notes:
1. The information below is written in the context of forming an LLC.
2. Make sure your LLC is approved before getting an EIN. You don’t want to get an EIN first and then later find out your LLC filing was rejected by the state. Exceptions are a Louisiana LLC and a West Virginia LLC.

This is the IRS’s definition of the EIN Responsible Party:

The “responsible party” is the person who ultimately owns or controls the entity or who exercises ultimate effective control over the entity. The person identified as the responsible party should have a level of control over, or entitlement to, the funds or assets in the entity that, as a practical matter, enables the person, directly or indirectly, to control, manage, or direct the entity and the disposition of its funds and assets. Unless the applicant is a government entity, the responsible party must be an individual (i.e., a natural person), not an entity.

That definition is likely confusing and will leave you scratching your head.

Here’s the simplified version for an LLC:

The EIN Responsible Party for an LLC must be one of the LLC Members (owners of the LLC).

The EIN Responsible Party is the IRS “Contact Person”

An easy way to think of the EIN Responsible Party is that it’s the IRS’s “contact person” for the LLC.

It’s the person whom the IRS will send mail and correspondence to, either providing information to the LLC or requesting information from the LLC.

Who can be the Responsible Party for an LLC?

The EIN Responsible Party for an LLC must be an LLC Member (owner).

• In a Single-Member LLC, the EIN Responsible Party must be the sole LLC Member.

• In a Multi-Member LLC, the EIN Responsible Party must be one of the LLC Members. Although any LLC Member can be listed, the person listed will take on the responsibility of making sure the LLC’s taxes are handled properly.

The IRS uses different titles for LLC Members (owners)

Although at the state-level, the official title for an owner of an LLC is “Member”, at the federal-level, things are spoken about differently at the IRS.

Let’s get you familiar with the IRS’s language, so you’re not confused if you have to call them.

• In a Single-Member LLC, the IRS refers to the LLC Member as the “owner“.

• In a Multi-Member LLC, the IRS refers to the LLC Members as the “partners“.

Can the Responsible Party be an LLC Manager?

If your LLC is Manager-Managed, it depends on whether or not the Manager is also a Member.

• If your LLC Manager is NOT a Member of your LLC, then they can’t be the Responsible Party.

• If your LLC Manager is ALSO a Member of your LLC, then they can be the Responsible Party. Just list them (or any other LLC Member) as a “Member” when filing the application for the Responsible Party

If your LLC is Member-Managed, you don’t need to worry about this. Just list an LLC Member as the Responsible Party.

(related article: Member-managed LLC vs Manager-managed LLC)

The EIN Responsible Party can’t be an entity (company)

The IRS made changes to the EIN Application that went into effect on January 1st of 2018.

The EIN Responsible Party must now be an individual person. It can’t be a entity (company).

To quote the IRS definition:

Unless the applicant is a government entity, the responsible party must be an individual (i.e., a natural person), not an entity.

Source:
Instructions for Form SS-4 (12/2017), see “Responsible party defined“.

Who can be the Responsible Party for an LLC owned by another LLC?

If you have one LLC (the “Child”) that is owned by another LLC (the “Parent”):

  • you can’t list the Parent LLC as the Responsible Party for the Child LLC; and
  • you can’t list the Parent LLC’s EIN on the new Child LLC’s EIN Application

This used to be allowed, but as of 2018, this is no longer the case.

Unless the LLC obtaining the EIN is a government entity (which will not be the case for 99% of our readers), the EIN Responsible Party must be a natural person. This means the Responsible Party must be an individual and can’t be a company.

Again, even though the LLC applying for a new EIN is owned by another LLC, you’ll need to list an individual person as the EIN Responsible Party. So in this case, you should just list one of the owners (Members) of the Parent LLC.

Only 1 Responsible Party is needed

The IRS only needs one (1) Responsible Party on file for your LLC’s EIN.

If your LLC is a Multi-Member LLC, the IRS doesn’t need the contact information of all the LLC Members. They just want one Responsible Party on file with the EIN.

The other LLC Members will be listed in your LLC Operating Agreement.

The EIN Responsible Party is not personally liable for IRS tax debt

A lot of readers wonder if listing themselves as the EIN Responsible Party will automatically make them personally liable if the LLC defaults, avoids, or evades taxes with the IRS by the fault of another LLC Member (in a Multi-Member LLC).

Just being listed as the EIN Responsible Party doesn’t automatically make you personally liable for the LLC’s IRS tax debts.

However, that doesn’t mean you won’t receive letters from the IRS and have to present yourself in tax court (in more serious circumstances) in order for it to become a fact that you are not personally “responsible” (personally liable) for the LLC’s tax debt.

The following two terms have different meanings:

  • EIN Responsible Party
  • “responsible” person

In tax court, it could be determined that the person listed as the EIN Responsible Party is not actually personally “responsible” for the LLC’s tax debt (if another Member knowingly lied or avoided paying/filing LLC taxes with the IRS).

Again, the easiest way to think of the EIN Responsible Party is it’s the “contact person” between the LLC and the IRS.

In a Multi-Member LLC, the person listed as the EIN Responsible Party should be the one willing to take on the role/responsibility of making sure all taxes are filed correctly and paid on time.

In a Single-Member LLC, as the owner, you must be the EIN Responsible Party. And just like in a Multi-Member LLC, you are not automatically personally liable for your LLC’s tax debts, however, if you knowingly lie or avoid paying/filing taxes with the IRS, then the IRS will go after you personally.

How to update/change the EIN Responsible Party for an LLC

To change the EIN Responsible Party for your LLC, you need to file Form 8822-B with the IRS.

Download Form 8822-B:
https://www.irs.gov/pub/irs-pdf/f8822b.pdf

Leave Boxes 1-3 unchecked and then enter your LLC name and EIN on lines #4a and #4b. Then leave #5, #6, and #7 blank.

Enter the Responsible Party’s name in #8 and their SSN or ITIN in #9.

In the “Signature” section, enter the Responsible Party’s phone number. This can be a cell, home, or office number. Then have the Responsible Party sign and enter today’s date.

For title:
– use “Owner” if you have a Single-Member LLC taxed as a Sole Proprietorship
– use “Partner” if you have a Multi-Member LLC taxed as a Partnership
– use your officer title if you have an LLC taxed as a C-Corp or S-Corp

8822-B Mailing Address:
Look at the bottom of Page 1 of 8822-B to determine where to mail the form to the IRS.

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Matt Horwitz
Founder & Educator at LLC University
Forming an LLC shouldn't be so complicated. Our step-by-step guide will make the process a breeze – and no complex legal jargon! We teach people how to form an LLC for free in all 50 states. We hope you find our free guides and resources helpful in your entrepreneurial journey.

33 Comments

  1. Dan March 23, 2018

    Can the general public look up and find out who is listed as the responsible party for an LLC? Is the responsible party public information? Thanks.

    reply
    • Matt Horwitz March 26, 2018

      Hi Dan, no, they cannot. The Responsible Party is private information kept on file with the IRS.

      reply
  2. Dan March 27, 2018

    Great, thanks!

    reply
    • Matt Horwitz March 27, 2018

      Sure thing Dan!

      reply
  3. Peter May 21, 2018

    I formed a single member LLC (LLC 2) for which my other LLC (LLC 1) is the only member. can LLC 1 be a responsible party with it’s EIN when applying for LLC 2’s EIN number online?

    I did just that and when I click submit at the end of application it keeps telling me that they were unable to complete my application and that I should try again in few minutes.

    from instructions it seems that only an individual can be a responsible party. here is portion from most current instructions (REV. 12-2017):
    “Unless the applicant is a government entity, the responsible party must be an individual (i.e., a natural person), not an entity.”

    what is the right way to proceed with my EIN application?
    thank you

    reply
    • Matt Horwitz May 22, 2018

      Hey Peter, you are correct. Effective 2018, the EIN Responsible Party can no longer be an entity, it must be an individual. We’ve update this lesson to reflect these changes. The correct way to proceed is to list yourself as the Responsible Party, even though the LLC is owned by your other LLC. The profits/losses of the child/subsidiary LLC will still flow up to the parent and I recommend working with an accountant to file your returns properly. Hope that helps.

      reply
  4. Peter May 22, 2018

    thank you Matt,
    so the part that says: “Unless the applicant is a government entity, the responsible party must be an individual (i.e., a natural person), not an entity.” does not mean that it has to be an individual?

    this part is in the most current instructions and was not in the previous one so I wonder if they changed how it works now.

    I hope you are correct, because I want to make sure that I can just move my profits from LLC 2 into LLC 1 for tax purposes and file as an s-corp under LLC-1.

    thank you again

    reply
    • Matt Horwitz June 17, 2018

      Hi Peter, yes, as of 2018, the Responsible Party must be an individual. We’ve updated the lesson to reflect the new changes. Having the Responsible Party be an individual (in this case, you) doesn’t affect the taxation of the child/subsidiary LLC. You’re still allowed to report it’s profits/losses along with the parent LLC in your tax return. We recommend working with an accountant to make sure all returns are filed properly. Hope that helps.

      reply
      • Jason August 1, 2018

        How should this be answered then?
        – I am one of the owners, members, or the managing member of this LLC.
        – I am a third party applying for an EIN on behalf of this LLC.

        Thank you!

        reply
        • Jason August 1, 2018

          I chose “I am one of the owners, members, or the managing member of this LLC.” and “JASON {LAST NAME} SOLE MBR” is listed at the top of my EIN. Is this ok? Thanks

          reply
          • Matt Horwitz August 15, 2018

            Hi Jason, yes, that is correct.

            reply
        • Matt Horwitz August 15, 2018

          Hi Jason, if you are the the Member (owner) of the LLC, then you would select “I am one of the owners, members, or the managing member of this LLC”. Hope that helps.

          reply
          • Jason August 15, 2018

            “I am one of the owners, members, or the managing member of this LLC” is ok when the sole member is another LLC but I’m the responsible party? Sorry, I should have made that more clear. Thank you

            reply
            • Matt Horwitz August 17, 2018

              Hey Jason, yea, I understand the confusion lol. It’s not really significant. Here’s what going on. The IRS rolled out new rules and it’s quite an undertaking for them. And many connected parts to those changes aren’t fixed for some time… like the confusion of being called a “SOLE MBR” of an LLC that you don’t own, but rather, your other LLC owns. However, if you have to call the IRS, they want to hear the word “owner” (or “partner” in a Multi-Member LLC). Once they hear that word, they’ll discuss the account with you. So just think of it as loose term, something like an indirect owner. The IRS isn’t too concerned about the “chain of command” (what company own what company), they just want to deal with the owner of it all, as in the final person. That’s my best interpretation for now, but hope that helps.

              reply
              • Jason August 17, 2018

                Perfect. Thank you so much!

                reply
                • Matt Horwitz August 17, 2018

                  You’re welcome man!

                  reply
  5. vinnie May 23, 2018

    Hi Matt,
    Thanks for sharing very informative article. I have a question.
    I have an Wyoming LLC registered. We are 2 partners in the LLC. One partner is an overseas citizen and does not have SSN or ITIN. I have filed for the EIN as me as a responsible party for the LLC.

    Now we want to open another LLC as operating company. This new company will be responsible to do all business activities, signing all agreements with our overseas customers in africa.
    Need advice and guidance:-
    1.) How and where to form this company
    2.) In this company me and my overseas partner will be the only 2 members
    3.) I need to make sure the structure we form for this company is correct as my overseas partner will apply for investment based immigration after approx 6 months.
    Any help is really appreciated. Thanks Vinnie

    reply
    • Matt Horwitz June 17, 2018

      Hi Vinnie, you’re very welcome. This is too complex of a situation for us to get involved with. You’ll need to hire or speak with someone else for assistance, especially #3 – you’ll want to speak with an immigration attorney. Thank you for understanding.

      reply
  6. Jessica May 24, 2018

    hey matt,
    im forming an LLC with another partner and im wondering, if i am the “responsible party” for the ein number and something is wrong with the taxes or so ever, am i the only one who is in trouble or my partner too?

    reply
    • Matt Horwitz June 17, 2018

      Hi Jessica, it’s the entity who is on the hook with the IRS, not the Responsible Party, however, mail and correspondence will be sent to the Responsible Party if there are issues. And if it really got down to it, all LLC Members would be disclosed in tax court and then the real “responsible” person would be identified. Hope that helps.

      reply
  7. Javier June 19, 2018

    Hello Matt. Great article — very useful as is all your content.

    I’m the manager of a recently filed single-member manager-managed Florida LLC. As the only manager, I’m applying for an EIN online as the Responsible Party / TPD, but when I reach the summary / confirmation page, under Responsible Party, it shows my name (as it should) but with “SOLE MBR” besides it. I am not a member of this LLC. I’m just the manager.

    Shouldn’t it said, “SOLE MGR” or something to that end? Does it really matter?

    Any comment would be greatly appreciated. Best regards.

    reply
    • Matt Horwitz June 20, 2018

      Hi Javier, we clarified some items with the IRS today. In a Manager-Manager LLC, where the Manager is not an owner, they should not be listed as the Responsible Party for the LLC. The LLC Member (owner) should be. Although you could list yourself, the IRS is looking for an owner and will assume it’s you. If you did this, it would cause issues if you had to call the IRS. The IRS can only speak with owners of the LLC. They can’t authenticate into an account by speaking to a non-Member Manager (aka non-owner). Curious, is the LLC Member (owner) a friend or family member? If you need to take care of things for them – (they’d be the Responsible Party) – then you/they could file a Form 8821 (Tax Information Authorization) or Form 2848 (Power of Attorney) and you’d be able to call and authenticate into the account. Apologies for any confusion in our article. We’ve since updated it to make things more clear.

      reply
      • Javier June 20, 2018

        Thank you for your response Matt. It was very helpful.

        To answer your question “Is the LLC Member (owner) a friend or family member?”, the owner is actually a Non-US Corporation. It is of my understanding that the responsible party can no longer be an entity, but it has to be an individual (i.e., a natural person).

        However, the IRS online application has the option of using an entity for the Responsible Party. I called the IRS and they suggested I use the paper/mail form and use the Non-US Company name as the Responsible Party.

        Would you agree with that? Any comments would be appreciated.

        Best regards.

        reply
        • Matt Horwitz July 30, 2018

          Hey Javier, you’re very welcome. Although the IRS rep said that, you’re now only allowed to list an individual person. The person listed can be an owner of the non-US company. Hope that helps.

          reply
  8. david d. August 9, 2018

    For the past 2 years I have operated a sole proprietorship with a properly issued EIN … for business reasons (taking on a partner and maybe 2) I want to form an LLC here in Massachusetts… do I have to apply for a new EIN or can I simply use my existing EIN as I would be the manager/member of the LLC I plan to form ??
    Thanks for your help

    david

    reply
    • Matt Horwitz August 15, 2018

      Hi David, you can’t use the same EIN. When taking on partners and forming a new entity, you’ll need to apply for a new EIN. Hope that helps!

      reply
      • David August 15, 2018

        Thanks very much – that was very helpful
        D

        reply
  9. Wallace August 29, 2018

    Hi Matt,

    Is possible the responsible party be a sole proprietorship with EIN?

    reply
    • Matt Horwitz October 10, 2018

      Hi Wallace, our research findings indicate that the IRS now wants the Responsible Party to be an individual using an SSN or ITIN. Hope that helps.

      reply
  10. Danielle Robinson September 6, 2018

    Hi!

    I am currently apart of a multi-member LLC. I act as the EIN Responsible party. I sign all the contracts and handle all the filings. The company address is also my home address. Does that make my property liable in any tax implication ? Can I change the company address to a PO box instead?

    Also,, we are considering changing the business structure to a Manager Member mIx (a few full time, a couple passive and a couple external). Do you happen to have annoperating agreement template?

    Lastly, have you ever heard of a multi-member LLC with no CEO? Is that possible? Is it recommended or not?

    Thank you!

    reply
    • Matt Horwitz October 16, 2018

      Hi Danielle, no, your property is not owned by the LLC. Regarding the address change, it depends on the state, however, most states don’t allow a PO Box for the Registered Agent. A few allow a PO Box for the Principal Office Address (or similar address). However, you could look into a mailbox rental as an alternative. Most of the time that can be used for your LLC’s address with the state as well as with the IRS. You can find Operating Agreement templates by clicking on your state from our home page and then selecting the Operating Agreement lesson. Although the title CEO can be used in an LLC, it’s more common to use the title Managers, Managing Members, and/or Members to distinguish roles. Hope that helps.

      reply
  11. Kelly Seyler September 27, 2018

    Hello, to be clear, how is the issue of the incorrect title of “Sole MBR” looked at. Specifically, for a single member LLC who has an entity as the sole Member, if we no longer are permitted to insert the entity sole member as the Responsible Party, how do we avoid having the Responsible Party being called “Sole MBR” in the address portion of the IRS Verification letter. The accurate Sole MBR is the entity but the title on the letter implies that the owner is the individual. Will the IRS be updating this default language on it’s online form. What do you suggest in the meantime?

    reply
    • Matt Horwitz October 25, 2018

      Hi Kelly, like you, we hope that it’s fixed at some point. When the IRS rolls out big changes like this, they usually repair the “small issues” slowly and overtime. This “Sole MBR” piece should be removed – I hear you. In the meantime, I would still list yourself as the Responsible Party if applying online. You could also try submitted Form SS-4 by mail or fax and see if it gets through (with listing the entity as the Responsible Party). Hope that helps.

      reply

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