Defining a responsible individual Responsible Individuals play an important and necessary role in the Certified Professional Employer Organization (CPEO) Application process. You are a responsible individual of a CPEO applicant, and must be reported as such, if any of the following apply to you: you own at least 33 percent of the CPEO applicant, you are a director, officer, managing member, or sole proprietor of the CPEO applicant; or you control, manage, or supervise the CPEO applicant, its operations, finances, or federal employment tax compliance. Section 301.7705-1(b)(13) provides the technical definition of a responsible individual PDF for purposes of the CPEO program. In addition, as provided by Notice 2016-49, the term "responsible individual" also includes: (1) in the case of a disregarded entity owned by a corporation or partnership, the responsible individuals of that corporation or partnership (as defined by the regulations); and (2) in the case of a disregarded entity owned by an individual, the individual owner. Responsible Individual Personal Attestation (RIPA) Responsible individuals must submit a Responsible Individual Personal Attestation (RIPA) as a prerequisite to the organization submitting a CPEO Application via the IRS Online Registration System. The RIPA gathers information that will allow the IRS to perform a suitability check on the responsible individual. A RIPA is required for all responsible individuals within a CPEO Application. Submitting a RIPA can't be done until the Identity Verification process is successfully completed. The RIPA must be completed before the CPEO applicant submits their application for certification as the CPEO applicant will need the responsible individual's INDV number from the RIPA to complete their application. What you need to complete a RIPA Your name, home address and phone number. The business name and Employer Identification Number (EIN) of the CPEO applicant for which you are a responsible individual. Your ownership percentage of the CPEO applicant, if applicable. The business names and EINs of all entities for which you are a responsible individual. For more information about what entities are covered by this requirement, see the CPEO FAQs. Additional information required Responsible individuals undergo several background checks including criminal background checks, tax compliance checks, experience reporting and others as part of the RIPA process. The Federal Bureau of Investigation (FBI) conducts criminal background checks using the responsible individual’s fingerprints. Criminal Background checks are performed when the RIPA is submitted and as part of the CPEO annual verification. Fingerprints are required for every responsible individual who completes a Responsible Individual Personal Attestation (RIPA) associated with an application for certification as a CPEO. As of June 1, 2022, fingerprinting for the CPEO program is completed electronically by following the steps below. Schedule an appointment at Fieldprint® Attend your appointment with the proper identification documentation Upon completion of your appointment, notify the application submitter of the CPEO that you have completed the fingerprint process For additional instructions on scheduling your appointment please see Publication 5249 PDF. In addition, a responsible individual must take the necessary actions to authorize the IRS to conduct background checks and to investigate the accuracy of statements and submissions made by the CPEO applicant and the responsible individual. This may include waiving confidentiality and privilege in situations where the IRS may be obstructed in obtaining or confirming information from relevant third parties (such as former employers) because of the existence of confidentiality, non-disclosure, or similar agreements. RIPAs are reviewed in conjunction with the CPEO application. Processing times are based on all the facts and information submitted with an application and the associated RIPAs. If the IRS requires additional information or clarification, it may contact the appropriate responsible individual or CPEO applicant. Updating information You may update or change any information on your RIPA if your License Rank on the Main Menu of the Online Registration System shows “Responsible Individual.” Access your online account and go to the Main Menu page of the Online Registration System. Under “Manage Your License Information” you will see an option to “Update RI Account Information.” Click the “Select” button to begin your update or make changes. Follow the instructions on each screen to identify the items you wish to update or change. You must also give a date of when each update or change occurred. You will have an opportunity to upload any supporting documentation and submit your updates under penalty of perjury. Once submitted, you can download and print a summary report of your updates and changes for your records. To update information to include a new CPEO applicant or existing CPEO, both you and the CPEO applicant or existing CPEO will need to submit an account update. Withdrawing a RIPA If you need to withdraw a RIPA, contact [email protected]. Refer to the CPEO Application Privacy Act and Paperwork Reduction Act Notice for guidance on why this information is being requested, how it may be used or disclosed, and the estimated average time needed to complete and submit the application.
