Every business has a name, and sometimes, for various reasons ranging from a rebranding campaign to a change in ownership, the name changes. If the business operates through a legal entity, such as a Virginia LLC, then an it changes its name by filing an amendment to the Articles of Organization with the State Corporation Commission in order to legally change the company’s name.
Doing this, however, does not change the business name on IRS records, meaning the name associated with the unique employer identification number (EIN) for the business. The easiest way to update the IRS’s records with the new business name is simply to use the new name when filing the business’s annual tax return and check the box at the top of the front page of the form indicating that the business name has changed. There is no need to reference the old business name on the tax return.
But what if, for some reason, the business needs to change its name prior to the next tax return filing season, or what if the business is a disregarded entity that doesn’t file a tax return? The IRS says to write them a letter; however, the instructions are not clear on what information should be included in the letter.
The most important items to include in a business name-change letter to the IRS are as follows: (i) the EIN number for the business, (ii) the old business name, and (iii) the business address, all of which must match the current IRS records. The letter should explain that the business name has changed, state the new business name, and request that written confirmation be sent once the IRS has updated its records.
The letter MUST be signed by the business owner or corporate officer that appears in IRS records as an authorized individual.
Finally, the business name-change letter should include a copy of the SCC Certificate of Amendment approving the name change filing. Name change letters usually take about six weeks to be processed by the IRS, but one could expect longer processing time during the COVID-19 crisis.