Reporting a Change in Responsible Party: What It Means for Your Tax-exempt Organization
Written by Whitney Roberson, CPA
IRS regulations require any entity with an EIN to update responsible party information within 60 days of any change by using Form 8822-B. You may also use Form 8822-B to notify the Internal Revenue Service if you changed your business mailing address or business location. While organizations will not be subject to penalties for failure to file this form, use of this form is mandatory for changes to responsible party information. Organizations that fail to file may not receive a notice of deficiency or a notice of demand for tax. Additionally, failure to receive such notices will not prevent the accrual of penalties and interest on any tax deficiencies.
The IRS defines a tax-exempt organization’s responsible party as a principal officer as further defined in the Form 990 instruction’s glossary. A principal officer is an officer of the organization who, regardless of title, has ultimate responsibility for implementing the decisions of the organization’s governing body, or for supervising the management, administration, or operation of the organization. This is also the officer listed in the heading of Form 990, Page 1.
While completion of this form is required for more than just tax-exempt organizations, nonprofit organizations tend to have frequent turnover in their “responsible party.” If your organization has a change in principal officer, please be sure to timely file Form 8822-B. If you require any assistance, please contact your BMSS tax professional at (833) CPA-BMSS or visit our website for contact information.