The Internal Revenue Service is reminding nonprofits to complete Form 8822-B, Change of Address or Responsible Party – Business, timely. Many systems for e-filing Form 990 will remind you of this form when you e-file this year. The form is used in two scenarios: 1) a change of address and 2) a change of responsible party. In each case, the information is to be updated with the IRS within 60 days of the change.
Change of address
There are two ways to accomplish a change of address with the IRS, so the applicable way will likely be based on when the change occurs.
- If you are filing Form 990, 990-EZ, 990-N, or 990-PF within 60 days of the change of address, you can update the address via the series 990 form and mark the box for change of address; this will fulfill the requirement to update the address with the IRS.
- If you are not filing a series 990 form within 60 days of the change of address, Form 8822-B needs to be completed and filed with the IRS to ensure the IRS has the appropriate address for the nonprofit. Simply fill out the type of return it applies to, if the business location is changing, the business name, employer identification number, old mailing address, new mailing address, and new business location.
Change of responsible party
When an Employer Identification Number is originally requested from the IRS, a responsible party from the nonprofit is listed on the request form. When there is a change to that responsible party, the IRS needs to be informed. The responsible party is generally needed when the IRS is dealing with a potential identity theft issue on a return. Forms 990-EZ and 990-PF have no mechanism to report who the responsible party is. Even the 990-N and 990 themselves that ask for the principal officer (which is the responsible party) do not have a mechanism on the form to indicate it is changed; therefore, it does not change the IRS business master file. Form 8822-B must be filed to update the IRS’s records of who the responsible party is.
The responsible party is the person who exercises ultimate effective control over the entity. For nonprofits, this must be an individual, not an entity, and it is generally the same as the principal officer. The principal officer has the ultimate responsibility for implementing the decisions of the organization’s governing body and, therefore, is most likely the equivalent of the president of the board of directors. The AICPA issued an article that indicates in cases where the entity has paid staff, the highest-ranking paid staff, such as the CEO or Executive Director, may meet the definition of responsible party and be included on the form.
When changing the responsible party, the type of return, entity name, entity employer identification number, and responsible party name are required. In addition, the responsible party’s social security number is also required. Because the timing of when the return is due does not align with the series 990 deadlines, there is no easy way for the IRS to see who the responsible party is, so if you are reporting a new responsible party’s name on Form 8822-B, the social security number is necessary. No public record of this form is available, so the social security number will be available only to the IRS.
Requesting CPA assistance
Your CPA will not automatically complete this return as part of the Form 990 series returns. You will need to specifically request this form be filed and provide the information to your CPA.