Any church that has employees, files employment tax returns, or has a bank or brokerage account, must have an ’employer identification number’ (EIN). This includes nearly every church in the United States.
In 2010, the IRS wanted to receive information about responsible parties for any employer in possession of an EIN to help ensure all tax-related correspondence was received by those employers. It began asking for the name and Social Security number of a responsible party through the Form SS-4 used to obtain an EIN.
By 2013 the IRS was becoming increasingly frustrated by its inability to communicate with responsible parties identified in employers’ SS-4 forms. This usually was due to the fact that the responsible party designated in an employer’s Form SS-4 was no longer serving in that capacity, due to death, relocation, or resignation. As a result, the IRS adopted an entirely new requirement that any employer with an EIN report changes in the identity of its responsible party to the IRS, using Form 8822-B. This new requirement was first announced on November 18, 2013, in the following notice in the IRS newsletter Employee Plans News:
Beginning January 1, 2014, any entity with an EIN, such as a plan sponsor, must report a change in the identity of their plan’s re-sponsible party on Form 8822-B, Change of Address or Responsible Party – Business, within 60 days of the change. If the change is made before 2014, and the sponsor has not previously reported the change, the sponsor should file Form 8822-B prior to March 1, 2014.
Confusion about this requirement soon followed, particularly among church leaders. Although no penalties were levied against any employer that didn’t meet the March 1, 2014, deadline or any employer that remains out of compliance, the IRS strongly urges all employers who have experienced a change in responsible parties to submit a Form 8822-B. A failure to do so may result in missed correspondence—correspondence that may contain warnings about missing paperwork, lingering taxes owed, or potential fines and penalties.
In the future, any change to a church’s responsible party now should be communicated to the IRS by filing a Form 8822-B within 60 days of the change.