Implications for Responsible party using SSN for filing with IRS for EIN/TIN
We’ve set up a VA corp wholly owned by our UK parent. One US citizen officer (VP of Growth) could be listed as IRS responsible party to get EIN instantly, or we can file with a foreign director (slower). What are the implications for her if she’s the responsible party now and later removed via 8822-B? Any ongoing exposure/liability? Or if indeed she remains as responsible party and isn't removed? What are the implications if she leaves the business?
Quick Answer:
If the US citizen VP is listed as the responsible party and later removed using Form 8822-B, her liability for tax matters generally ceases upon the IRS's acceptance of the form. However, her liability for actions *before* removal remains.
If she remains the responsible party and leaves the business, her liability for pre-departure tax obligations continues. She is not liable for the corporation's post-departure tax obligations unless she remains an officer with ongoing responsibilities or engages in willful tax evasion.
Filing with a foreign director may delay EIN issuance but doesn't inherently create additional tax implications for the VP. The corporation remains responsible for its tax obligations regardless of the responsible party designation. Consult a tax attorney for comprehensive legal advice.
Note: This answer is provided for convenience only. It is important that you speak to a CPA about your individual tax situation.
