Well, it’s been quite a week for all of us! Our national real estate team has compiled the top COVID-19 questions we received from our clients. The following is a summary of our guidance and suggested action items:
Continue Reading Commercial Real Estate Tips of the Week: Practical Answers from Sheppard Mullin’s Coronavirus Task Force
Carolyn Benson
IRS Change in Application Requirements for Obtaining Employer Identification Number Could Affect Many International Investors in U.S. Real Estate
Effective May 13, 2019, the Internal Revenue Service (IRS) changed the requirements for obtaining an employer identification number (EIN)[1]. The IRS no longer permits an entity to be named as the “responsible party” on IRS Form SS-4 (Application for Employer Identification Number). Instead, only an individual can act as a responsible party. This is particularly significant because the instructions for Form SS-4 seem to require the responsible party to provide their social security number (SSN) or individual taxpayer identification number (ITIN) on the application. A “responsible party” is generally defined as the person who owns, controls or exercises sufficient control over the entity. The responsible party is often the owner, manager, officer, or trustee of the entity. For many entities controlled by non-U.S. persons, the only individual that is capable of satisfying the criteria of a “responsible party” is a non-U.S. individual that does not have a SSN or ITIN. For non-U.S. individuals the process for obtaining a ITIN can be lengthy and onerous, requiring the applicant to produce a significant amount of documentation to verify their identity and two months or more for the IRS to process.
Continue Reading IRS Change in Application Requirements for Obtaining Employer Identification Number Could Affect Many International Investors in U.S. Real Estate
IRS Change in Application Requirements for Obtaining Employer Identification Number Could Affect Many International Investors In U.S. Real Estate
Effective May 13, 2019, the Internal Revenue Service (IRS) changed the requirements for obtaining an employer identification number (EIN). The IRS now requires that an individual with a social security number (SSN) or individual taxpayer identification number (ITIN) be named as the “responsible party” on IRS Form SS-4 (Application for Employer Identification Number), except in the case of federal, state, local, and tribal governmental entities (See IR-2019-58). Previously, an entity that owned the requesting entity could be named as “responsible party” and provide its EIN on the form. This change is likely to affect international investors in the real estate industry who form special purpose entities to acquire real property.
Continue Reading IRS Change in Application Requirements for Obtaining Employer Identification Number Could Affect Many International Investors In U.S. Real Estate